Inflation expected to push economy into recession

KPMG’s latest UK Economic Outlook report predicts GDP growth will more than halve to 3.2% this year, from 7.4% in 2021, and fall to 0.7% in 2023. KPMG warned that the invasion of Ukraine and renewed lockdowns in China put upward pressure on commodity prices and keep supply chains under strain, UK GDP growth is…

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Tight labour market shows signs of cooling the pandemic recovery

High inflation is causing real pay packets to shrink at their fastest rate in a decade, while the slowdown in growth may be causing the tight labour market to cool as unemployment ticks up, the Resolution Foundation said today (Tuesday) in response to the latest ONS labour market statistics. With CPI inflation hitting a 40-year…

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Bank of England raises rates with one in seven micro businesses still not fully trading  

The Bank of England’s Monetary Policy Committee’s vote to increase the base rate to 1%  follows the release of ONS figures showing that 16% of microbusinesses are still not currently fully trading (compared to only 3% of big businesses) meaning that small businesses will be hit harder with a ‘cost of doing business.’ Responding the…

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Retail sales drop as consumer spending falls

Retail sales fell unexpectedly by 1.4 per cent last month, as consumers reduced their spending due to the increase in living costs, according to figures published by the Office for National Statistics (ONS). The ONS said the fall was largely down to a decrease in demand for online purchases. New retail figures show the amount…

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Recovery accelerates as manufacturers shoulder inflation pressure

The number of UK sectors reporting output growth rose in March, according to the latest Lloyds Bank UK Recovery Tracker. However, while UK services businesses benefited from strong demand and a further loosening of Covid-19 restrictions, goods producers were disproportionately affected by the war in Ukraine – leading to the largest gap between manufacturing and…

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SPRING STATEMENT: National Insurance threshold and cuts fuel duty – Industry reaction

24th March 2022 Arrears and Recoveries | #economy

The Chancellor delivered a Spring Statement which will reduce fuel duty on petrol and diesel by 5p per litre for the next year and announces a £5 billion income tax cut from 2024. The National Insurance starting thresholds will rise to £12,570 from July.  The Government says that the tax cut, worth over £6 billion,…

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Government must borrow billions or see incomes squeezed

11th March 2022 Consumer Collections | #economy

The Institute for Fiscal Studies (IFS) has said decisions taken by the Chancellor in his Spring Statement will reveal whether he believes the Government should be protecting consumers from external events or not. IFS says with the cost of living soaring, Rishi Sunak will have to decide whether to cut spending or borrow more to…

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UK faces the biggest income squeeze in generations as inflation heads towards 40-year high

8th March 2022 Arrears and Recoveries | #economy

The Resolution Foundation has warned that a typical household’s income will fall by about £1,000 this year once the effect of inflation is accounted for. The change in inflation would be the biggest real-terms fall in incomes since the mid-1970s, the think tank added. It expects inflation to peak in April at 8.3% – much…

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Labour market grows but real pay squeeze deepens

16th February 2022 Consumer Collections | #economy

UK wage growth failed to keep pace with the rising cost of living between October and December, Office for National Statistics (ONS) figures show. While wages increased, when taking inflation into account pay was down 0.8% compared to a year earlier. Employees’ regular pay, excluding bonuses, grew by 3.7% between October and December from a…

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Household finance squeeze leads to growth downgrade prediction for 2022

10th February 2022 Global | #economy

The bounce back in the UK economy was stronger than expected last year, but the EY ITEM Club’s Winter Forecast has nevertheless downgraded its projections for UK GDP growth for 2022. The EY ITEM Club believes that UK GDP grew 7.3% in 2021, up from the 6.8% predicted in its previous forecast. Growth of 4.9%…

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Inflation hits 30-year high

20th January 2022 Consumer Collections | #economy

Official figures show that inflation jumped to 5.4% in December, with this the highest rate since the 7.1% recorded in March 1992. The consumer price index (CPI) measure of inflation was up from 5.1% in November, with soaring food costs and energy price increases helping drive the rate up. The Office for National Statistics (ONS)…

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Pay packets shrinking for the third time in decade

20th January 2022 Global | #economy

Real wages officially began to fall in November, and the current period of shrinking pay packets is likely to get worse before it starts to ease in the second half of 2022, the Resolution Foundation said in response to the latest ONS labour market statistics. Real regular average weekly earnings wages fell by 1 per…

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CFOs optimistic about 2022 outlook

A Deloitte survey of CFOs found persistent labour shortages, the pandemic, climate change and higher inflation were seen as the leading risks to their businesses in the year ahead. However, some 37% said that increasing capital expenditure was a priority for 2022. This is the highest figure recorded by Deloitte since it first asked the…

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