UK Economy 2021
UK Economy 2021. Business environment has uh changed uh we’ve gone from a situation where our members uh on balance uh were much more optimistic about future prospects. For the wider uk economy to a situation sadly where just slightly more people are pessimistic about the uk economy over the next 12 months than are optimistic and these are typically small and medium-sized businesses 85outside.
London uh institute of directors members so these are the individuals actually leading their firms they’ resaying that their costs are expected uh to rise to a greater extent than their revenues um in the 12 months coming up and our sense is that this is attributed to a number of factors.
There’s the widely publicized supply chain problems that are affecting all different sectors of of the economy and of course just as our poll went into the field in early september.The government said that it would be raising employers national insurance which is basically a flat tax on employing people regardes of what your uh profits are doing so we think that that’ probably had an effect. Visit here for new bbc news ni
Already sort of supply issues in the labor market we we know that there are staff shortages our members are telling us that they’re having uh staff shortages around a half of iod members are reporting that to us and they’re very concerned about it,and interestingly um whilst.
There is a bit of a sort of pandemic and brexit effect uh the majority of those firms that say they are experiencing shortages of uh staff are saying that this is a a long term sort of endemic problem and they’re very much looking to government. There’s a bud get obviously coming up in a month or so that they’re looking to government to do something about it and so what today’s data shows is is that this is very real in terms of um how businesses are feeling that the environment has changed.
we have definitely no longer got the sort of post-pandemic euphoria that we that we saw in in the summer in fact firms are feeling the same about the economy as they did in the height of the third lockdown um which is slightly concerning and why does this matter well.Because if you think that uh the sort of overall wider economic outlook is looking a bit cloudy then of course you’re less likely to feel confident enough to invest to put your firm’s retained profits or your shareholders cash into investing for a sort of medium-term plan and that’s that’s not good for future prospects and not good for government tax revenues in the future.
A formere conomic secretary to the treasury on in the last labour government what would you be doing in the government’s shoes they’ve obviously got a colossal budget deficit borrowing has gone through the roof. They have to do something to try and restore order to the public finances don’t they absolutely and nobody disputes that what has happened over the last few month show ever is that tax revenues have come in at a faster rate than was anticipated at the time of the last budget and of course it’sa rising corporation tax plus a hike.
To national insurance that is currently uh doing the heavy lifting in terms of uh how the debt consolidation uh plan is expected toto operate the message from the latest economic datais perhaps. The government are slightly kind of overshot in what it’s doing um and it’s starting to have a very real effect on the economy so maybe time to sort of re recalibrate and think again about how they’re going to to introduce. visit