Credit, Collections & Insolvency News
Figures from the Office for National Statistics (ONS) show that the economy expanded by 0.3% in January, with the rebound following a 0.5% contraction in December. While the data shows month-on-month growth, the economy stagnated in the November to January period compared with the previous three months.
The report also showdc that January saw a fall in output in both the manufacturing and construction sectors.
Darren Morgan, the ONS’s director of economic statistics, said “While the economy “partially bounced back from the large fall seen in December. Across the last three months as a whole and, indeed over the last 12 months, the economy has, though, showed zero growth.”
Responding to ONS figures Tina McKenzie, Policy Chair at the Federation of Small Businesses (FSB), said “While January’s figures are a glimmer of hope, the flat growth over the previous three months means we’re not out of the woods yet, with tough trading conditions persisting for many small firms. Plenty of challenges remain. Inflation has only barely eased, and the tax burden for small firms is as high as it’s been for seven decades.”
“The closure of the Energy Bill Relief Scheme at the end of this month is a looming deadline for many small businesses who are likely to see their bills shoot up. The planned fuel duty hike must not take place, as it would be devastating for countless small businesses which rely on their vehicles. We’re looking for a Budget that focuses on our three priorities: help for small businesses to drive growth, to boost investment, and to increase labour market participation.”
“We want to see business rates overhauled, with many more small firms taken out of paying them, giving them some breathing space and reducing the day-one costs faced by new enterprises. Small firms will be looking to the Chancellor to demonstrate his leadership on late payments when he stands up on Wednesday.”
“Outside the Budget, we’re calling for energy firms to allow small business customers who fixed their contracts while costs were sky-high to be able to blend and extend their contracts, to ensure they don’t face unaffordable bill increases in April.”
Ben Jones, CBI Lead Economist, said “The slight rebound in growth at the start of the year wasn’t altogether surprising, given the sharp drop in December. But activity is likely to be subdued in the near-term, given the headwinds of high inflation, still-high energy prices and rising interest rates. However, sentiment is improving, and business leaders are hopeful of a more stable operating environment later this year.”
“The government should use the forthcoming budget to overcome the prevailing economic headwinds by tackling the barriers holding firms back. This includes solving labour shortages by reforming childcare and helping bring more working parents back into the workforce, as well as finding a replacement to the super deduction ahead of the planned six-point increase in corporation tax.”
TUC General Secretary Paul Nowak said “To fix the economy the government needs to get on with fixing pay. Pay cuts have forced families to cut their spending. And that means businesses have fewer customers. The Chancellor must put pay rises at the heart of next week’s budget. It’s the fuel in the tank that our economy needs to get moving again.”
“The other thing holding back our economy is Conservative cuts to our public services and infrastructure. If we want a stronger economy, we need stronger public services. We need healthcare, childcare, education, and transport systems that meet the needs of working families and businesses. This is the big credibility test for the government’s economic plans.”