Lorry drivers may be in short supply and fuel hard to come by at the pumps. But, things aren’t as bad as they seem. At least that’s according to the Office for National Statistics. Official statisticians have improved the outlook for the UK economy.
But such optimism is not shared by the Federation of Small Businesses which warns businesses may be facing ‘an autumn storm’.
At least the ONS in its revised figures doesn’t consider the UK economy to have suffered its worst collapse since the Great Frost of 1709 anymore.
The statistics show that in 2020, the year of Covid, GDP shrank by 9.69%, an improvement on the estimate of 9.8%, meaning things were worse in 1921. Just. That year saw a plunge of 9.71%.
The revised figures also show that GDP increased by 5.5% in April-June this year, better than the estimate of 4.8%.
But that may be of little comfort to small businesses facing ‘challenges on many fronts’, according to the FSB.
To find out more about how we can assist you with your Second Charge Mortgage please click here
Mike Cherry, National Chair of the Federation of Small Businesses (FSB), said: “From rising energy and input costs to staff shortages and supply issues, the removal of some of the support measures brought in to hold off the worst effects of the pandemic on businesses will be tough for many to navigate.
“It’s potentially a dangerous moment. As the weather turns colder, so too will the operating environment for many firms. With recent economic growth numbers having fallen below expectations, the upcoming festive season may not provide as much of a boost as hoped to many small businesses’ bottom lines.”
The skills shortage is continuing to bite – not least in tourism and hospitality, which also have to factor in a higher rate of VAT as well.
He added: “Firms feel assailed on all sides, from energy prices and fuel shortages to longer-term changes to taxes which will disincentivise growth and investment.”
However, Britain’s manufacturers hit a record high level of output and orders in the last quarter as growth surged in response to the UK and overseas economies opening up, according to Make UK and business advisory firm BDO.
Stephen Phipson, Chief Executive at Make UK, said: “Growth prospects continue to accelerate for manufacturers as economies at home and abroad continue to open up. However, supply chain shortages and the rapidly escalating increase in shipping costs are threatening to put roadblocks on the road to faster growth despite the current optimism.”
And, the Confederation of British Industry says that private sector activity grew at an above average rate in the three months to September, although there was a slowdown.
The slowdown was fairly broad-based, with growth softening in consumer services (+6% from +30%), distribution (+29% from +53%) and manufacturing (+16% from +22%). Meanwhile, business & professional services firms reported a slight uptick in the pace of growth (+39% from +32%).
Anna Leach, CBI Deputy Chief Economist, said: “The private sector recovery has slowed this month as the immediate boost provided by loosening COVID-19 restrictions fades amidst a mix of labour and materials shortages, and supply chain disruption.”
By Richard Wright
Source: Punchline Gloucester
Discover our Second Charge Mortgage Broker services.