The Chamber Expo is upon us again, 12th October at the Three Counties Showground. Many congratulations to the events team who have sold a record number of stands: 120 sold with a waiting list, so it should be an outstanding business opportunity for all concerned.
Quarterly Economic Survey (QES).
I thought I’d highlight the feed back that is gathered nationally and summarised by the British Chamber of Commerce. Robert and the team take every opportunity to bend your ears about completing it. We are one of the top provider of QES returns back to the BCC. The 2nd highest returns in the UK of the 53 Chambers of Commerce and 1st outside of London.
The BCC run the UK’s leading research programme on business sentiment and economic conditions. It draws together insights from tens of thousands of businesses who make up Chamber of Commerce membership. No other organisation has the level of research into the UK business community and it provides the highest-quality evidence base. Influencing decision making for the UK government, the Bank of England and businesses globally.
These research findings are widely recognised as unique, relevant and receive widespread national and international coverage. This research programme has been running since 1989 and has accurately anticipated large-scale shifts in the UK economy, from the 2008-09 recession to the Covid recession and subsequent inflation crisis. The BCC forecasts are recognised by the Sunday Times as one (top four) most accurate UK economic forecasts (2021). Below is the summary based on the latest national QES.
The Economy
The UK economy remains on course to avoid a technical recession, with a growth rate of 0.4% expected for the whole of 2023. This drops to 0.3% in 2024, and rises only slightly to 0.7% in 2025. The inflation rate is expected to slow to 5.0% in Q4 2023, unrevised from last quarter, but is revised up to 3.0% for Q4 2024. The interest rate is expected to be higher for longer than previously forecast. Imports, exports, and general government spending are all expected to decline in 2023.
Gross Domestic Product (GDP) Growth
In the short term, the BCC is expecting 0.4% growth for the whole of 2023, falling to 0.3% in 2024 and rising slightly to 0.7% in 2025, a downward revision from the BCC’s previous forecast. This reflects the negative impact of inflation and interest rates on household spending and their dampening effect on overall business investment, and while a technical recession is likely to be avoided, many households and SMEs are likely to experience recession-like conditions. Both imports and exports down significantly in 2023 (-4.7% and -4.3% respectively) due to weak global demand and the continuing impact of Brexit. Further regulatory changes at both the UK and EU borders are also likely to weigh on trade flows.
Inflation
While BCC research shows inflation is the top concern for UK firms (cited by 69% of respondents in the BCC’s Quarterly Economic Survey) fewer businesses now expect their prices to rise over the coming months. The forecast for the CPI rate, therefore, remains unchanged at 5.0% in Q4 2023. Energy and commodity prices continue to fall but core inflation remains stubborn. A wage price spiral limits the fall in core inflation which is factor in a prolonged and higher interest rate, peaking at 5.5% in Q4 2023, and falling to 5.25% and 4.5% in 2024 and 2025, respectively.
Employment
The UK labour market remains very tight with the BCC’s Quarterly Economic Survey showing that around eight-in-ten firms attempting to recruit are facing recruitment difficulties. However, a modest increase in the unemployment rate is expected, peaking at around 4.7% in 2024. Average earnings are now expected to grow more strongly over the next three years, with 5.5% growth in 2023 and 3.5% in 2024 and 2.5% in 2025, this is above the forecasts for year-end CPI inflation in the next two years.
As you can see the information provided both locally and nationally from the other 52 regional Chambers combines to make a very powerful forecasting tool. We locally return the most surveys in the UK outside of London. Please keep that level of input as high as you can. For the latest and archive reports go here: BCC Economic Forecasts.
I can’t make the Expo on this occasion, but will no doubt see you at other events.
Mike