Political Uncertainty and rising inflation indicate weakening growth prospects

14 Jul 2017

Business Featured

View the latest results of the Quarterly Economic Survey here.

The latest economic data suggests that the UK economy is entering a more challenging period. Higher inflation is a key business concern as it squeezes margins and weakens businesses’ ability to invest, particularly during this time of heightened political uncertainty.

The St Helens Economic Survey findings for the second quarter of 2017 remained sluggish with little change to the key economic indicators, particularly in services. While some businesses are cautiously optimistic for their own prospects, they remain wary about the growth prospects of the UK economy as a whole.

On a positive note employment growth remains steady for both sectors and the number of firms working at full capacity has increased in both sectors. Capital investment plans improved for manufacturing but the service sector remains more cautious.

Since the General Election, the top priority for business communities across the UK has been a workable government that can do more than just tackle Brexit negotiations. Action is needed to improve the environment for business and industry here at home. For business, action on the economy will be the true test of the new Government.

Tracy Mawson, Deputy Chief Executive of St Helens Chamber, commented: “In the wake of an inconclusive General Election, wariness increases as does the sense that the UK economy is treading water. With inflationary pressures expected to intensify and consumer spending forecast to slow, the outlook remains mixed at best.

“With details of the terms of Britain’s exit from the EU still to come and general volatility in the economy, there are risks to the economy.  However our businesses have been operating in this environment for some time now and they are taking it in their stride, staying focused on what they can control and on their business.

“While the recent election campaign had almost no focus on supporting business, action to boost business confidence and growth remains urgent. The cost of doing business in the UK is too high – and weighs on the investment, recruitment and growth capabilities of our firms.

“Companies are faced with significant currency fluctuations and rising upfront costs, and their growth efforts are hampered by skills shortages and poor physical and digital connectivity. Westminster must come together to tackle these issues, which together with a pragmatic and economy-focused Brexit deal, will give business communities the best opportunity to foster lasting growth across the UK.”

St Helens Chamber will be working very closely with the British Chambers of Commerce to articulate the concerns of St Helens businesses at the highest level of Government.