Falling value of the pound has helped our exporters
- Credit: citizenside.com
Town Topics with Greater Ipswich Chamber of Commerce
Back in December, our national body – the British Chambers of Commerce (BCC) – published its economic forecast for the period 2016 – 2018.
Unlike many other predictive models, the BCC bases its projections on what its members actually say is happening to them now and their own thoughts about the future.
The overall message is that economic activity is doing better than many other forecasters considered possible, especially given the vote in June to leave the European Union (EU).
Our UK GDP growth forecast has been increased from 1.8% to 2.1% for 2016, and from 1.0% to 1.1% in 2017.
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The improved growth forecast for 2016 is being driven by stronger than expected growth in Q3. Growth of 0.5% is expected in Q4 of last year.
The downward movement in the pound since June has offered the chance for UK firms to secure more deals in existing and new international markets. Figures from the Office for National Statistics showed that the narrowing of October’s trade gap was largely due to an impressive uptick in exports; by £2.1bn to £26.8bn.
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But businesses have also signalled that such resilience and opportunities may well slow down over the medium-term - unless the right measures are put in place.
The BCC has downgraded expectations for 2018 growth from 1.8% to 1.4%. In part this reflects the squeeze on household incomes as import prices rise, but also the continuing uncertainty regarding the timetable and details of the UK’s negotiations to leave the EU.
Suffolk Chamber believes that there are a number of steps that the Government can and should take to help ambitious firms overcome the risks, real and perceived, borne out of political uncertainty.
The most pressing is for ministers to clarify the future status of existing EU workers as soon as possible, to end the insecurity now facing employees and businesses alike. This is of particular importance to certain key Suffolk sectors, including agriculture and food processing.
We are also pressing Government to provide more detail as to its emerging industrial strategy, especially as this relates to bringing forward vital road and rail improvements and the long overdue need to re-balance the UK economy away from an over reliance on services and household spending as drivers of growth.
Rest assured, your Chamber will continue to support its members and the rest of Suffolk’s business community by making sure your voices are always heard by those who have an influence over our economic prosperity.
Catherine Johnson, chair of Suffolk of Chamber of Commerce in Greater Ipswich