Flatlining UK economy needs a boost in the Spring Budget: Beckie Hart

As 2024 picks up pace, businesses across Yorkshire and the Humber are back in action. Every day, I speak to business leaders who tell me about their ambitions – and concerns – for the year ahead.

This year brings great potential, with plenty of chances to upgrade the UK’s growth prospects.

But we’ve got some way to go before we can confidently seize those opportunities.

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Last Friday, the latest GDP figures provided some relief, as the economy grew by 0.3 per cent in November.

Jeremy Hunt is being urged to introduce pro-business policies at the Spring Budget. Photo: Maja Smiejkowska/PA WireJeremy Hunt is being urged to introduce pro-business policies at the Spring Budget. Photo: Maja Smiejkowska/PA Wire
Jeremy Hunt is being urged to introduce pro-business policies at the Spring Budget. Photo: Maja Smiejkowska/PA Wire

According to the Office for National Statistics (ONS), Black Friday Sales provided a boost to retailers, with the service sector leading the charge on this uptick.

Following a fall in figures in the previous month, the rebound is stronger than many expected.

And while that means the UK likely avoided a technical recession in 2023, the overall economic picture remains dull.

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Despite those encouraging figures, the diagnosis is clear: the UK is suffering from a flatlining economy.

Beckie Hart has her say.Beckie Hart has her say.
Beckie Hart has her say.

Consumers are feeling the pinch of the cost-of-living crisis, with many dialling down their overall spending.

At the same time, firms face a myriad of challenges, including dampened demand, high costs, and labour shortages.

The CBI’s recent surveys confirm that the economy is going to struggle to gain traction in the short term. That’s bad news for businesses across all sectors.

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Our latest Financial Services Survey shows that business volumes in the sector are falling – with both sentiment and profitability stagnating.

On the upside, headcount growth sped up over the past quarter, and is expected to remain quick in the months ahead.

At the same time, many are likely to increase their investment going forward.

For the first time since December 2014, financial services firms expect to up their investment, especially when it comes to machinery and vehicles.

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That’s no doubt in part thanks to Chancellor Jeremy Hunt’s decision to make full expensing permanent – something the CBI had been calling for on behalf of UK plc.

But the UK’s economy is not yet firing on all cylinders. There’s more to be done to improve our economic future.

The Spring Budget is now less than two months away. It’s a prime opportunity to forge ahead with a more extensive programme of measures boosting innovation, skills and decarbonisation.

Businesses, particularly those in the financial services sector, are also looking for an update on the green finance strategy, because they know that firms, in the Humber especially, are keen to play their part on our road to net zero.

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With the General Election fast approaching, parties across the board will be working away on their vision for the UK economy.

Here at the CBI, we’ll be speaking to businesses and politicians, as we look to accelerate our growth journey.

Firms know what’s needed to stimulate investment, get people back into work, and build a more prosperous UK economy – and the Spring Budget is the Government’s next chance to put those ideas into action.

To have your say on what you want to see in the CBI’s Spring budget submission, join our online consultation on Thursday January 18.

Beckie Hart is CBI regional director for Yorkshire and Humber

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