8 minute read
Economy
UK Economic Outlook in 2022 downgraded by BCC
The British Chambers of Commerce has downgraded its expectations for UK GDP growth for 2022 to 3.5% (from 3.6%) against a deteriorating economic outlook. It now expects the UK inflation rate to reach 10% in Q4 2022, comfortably outpacing average earnings growth. The heightened economic uncertainty and rising costs are also expected to significantly weaken business investment, with 1.8% growth predicted in 2022, down sharply from 3.5% in the previous forecast.
GDP GROWTH
Expectations for growth in 2022, at 3.5% are now less than half the 7.5% growth recorded last year. Quarter on quarter GDP is expected to flatline with no growth expected in Q2 and Q3 before contracting by 0.2% in Q4. This negative outlook reflects a combination of soaring inflation, weak business investment, tax rises and the global economic shocks - initially caused by Covid and then compounded by the war in Ukraine. Annual UK economic growth is expected to slow sharply to 0.6% for 2023 before recovering slightly to 1.2% in 2024. Consumer spending is now forecast to grow at 4% in 2022, a fall from the 4.4% prediction in the first quarter. This reflects the historically high squeeze on real household incomes as inflation far outpaces the forecast 5% growth in average earnings for the year.
INVESTMENT
Business investment is forecast to grow at 1.8% in 2022, a large downward revision from the previous forecast of 3.5%. The downgrade reflects heightened political and economic uncertainty, and rising cost pressures which are limiting smaller firms’ abilities to invest. The BCC’s survey data for business investment have shown no sign of recovery since the start of the Covid pandemic.
INFLATION
Businesses and consumers face unprecedented inflationary pressures flowing from rising raw material costs, the increase in the energy price cap, and upward pressure on energy and commodity prices. The Consumer Price Index (CPI) inflation rate is expected to reach 10% in Q4 of 2022. This would be the highest since CPI records began in their current form in 1989. CPI inflation is expected to finally fall back to the Bank of England’s 2% target by the end of 2024. At the same time the Bank’s interest rate is expected to rise to 2% in 2022 and 3% in 2023. These represent significant shifts from the 1% and 1.5% rates previously forecast in Q1. Commenting on the forecast, Alex Veitch,
Director of Policy at the British Chambers
of Commerce, said: “Our latest forecast indicates that the headwinds facing the UK economy show little sign of reducing with continued inflationary pressures and sluggish growth. The war in Ukraine came just as the UK was beginning a Covid recovery; placing a further squeeze on business profitability.“ “The forecast drop in business investment is especially concerning. It is vital that urgent action is taken here, and we are having constructive conversations with the government about its review of capital allowances and other policies to incentivise business investment.”
“With inflation forecast to race ahead of wages, we are concerned about a dip in consumer spending which would further impact businesses and hamper growth. We forecast that if trends continue, inflation will only return to the Bank of England’s target rate at the end of 2024, implying a prolonged period of difficulty for the UK.” “Against this backdrop, the government must put in place stable and supportive policies that help businesses pull the UK out of this economic quagmire. Firms must be given confidence to invest, only then can they drive the growth the economy so desperately needs.”
Key points in the forecast:
• UK GDP growth forecast for 2022 is 3.5%, 0.6% in 2023 and 1.2% in 2024
• Following Q1 2022 growth of 0.8%, quarteron-quarter GDP growth is forecast to come to a halt with zero growth in Q2 and Q3, before a 0.2% contraction in Q4 2022.
• Household consumption forecast is for growth of 4% in 2022, growth of 0.6% for 2023 and 1.2% in 2024
• Business investment forecast is to grow by 1.8% in 2022 before more than halving to 0.8% in 2023, amid the end of the super deduction and the corporation tax rise, and then rising to 1.5% in 2024
• BCC expects export growth of 3% in 2022, 2.3% in 2023 and 1.6% in 2024, compared to import growth of 6.9%, -2.7% and 1.7%
• BCC expects UK unemployment rate of 3.8% in 2022, 3.9% in 2023 and 2024
• CPI inflation is forecast to peak at 10% in Q4 2022, before easing to 3.5% by the end of 2023. Inflation is expected to drop back to the Bank of England’s 2% target by Q4 2024
• UK official interest rates are expected to rise to 2% by Q4 2022 and then to 3% in Q4 2023, ending 2024 at the same level.
Inspiring you to use products that are better for you and the planet. Period.
In this Inspiring Herts edition, we’re embracing a topic that isn’t often talked about. Periods.
WasteAware is the partnership of waste teams at councils across Hertfordshire, on a mission to reduce single-use plastics, reduce waste and raise awareness of the options available for reusable products.
For many years WasteAware have run campaigns encouraging the move away from visible singleuse items, like water bottles and bags. Now the conversation is including unspoken waste too. So, what’s the issue with traditional single-use period products?
Don’t flush!
Pads
Tampons
Packaging
Have you considered reusable period products?
They can save you money and reduce waste. Sustainable Periods
Better for you and the planet. Period.
WasteAware.org.uk/SustainablePeriods #SustainablePeriods @HertsWasteAware
• Many period products can contain up to 90% plastic, with a pack of disposable pads containing 5 plastic bags worth on average.
Most tampons contain plastic too (not just the applicator but the absorbent part too). • People who have periods use more than 11,000 disposable period products each in their lifetime. It is estimated that 4.6 million of these are flushed down toilets every single day! • During lockdown 30% of girls in the UK aged 14-21 years struggled to afford or access period products. With reusables, they are always available.
We aim to empower a change in attitudes to periods by offering a deliberately inclusive and fun social media campaign to appeal to a broad audience, sharing stories from the increasing number of people who already love using them. Search #HertsSustainablePeriods to take a look. The webpage at: https://www.hertfordshire. gov.uk/sustainableperiods raises awareness of the different types of reusable period products available, including reusable pads, period pants and menstrual cups, sharing information on how to use and care for them.
Money Off Discount for all
Also, via the webpage, Hertfordshire residents are invited to apply for 15% discount off a selection of reusable products from several suppliers, suitable for all ages, needs and preferences to help reduce the up-front costs for those wanting to switch to more sustainable, reusable period products. Long term savings can be around £100 a year, with reusable items lasting 5-10 years depending on the product.
Teaching the next generation
But that’s not all. WasteAware, working alongside the county’s Sustainable Hertfordshire team have partnered with the Women’s Environmental Network (WEN), to help bring reusable, sustainable period products into schools across Hertfordshire. A free training course for school staff seeks to introduce reusable period products to a younger audience where they can be normalised as part of schools’ regular teaching on periods and menstrual health. Resources provided for free to schools include a virtual pack containing videos and lesson plans, posters for toilet doors and a demo kit containing examples of each product. The partnership aims to tackle an array of issues– not just the sheer volume of waste created by traditional menstrual products, much of which contains plastic, but also break down taboos around periods, address period poverty, help keep our sewers free of ‘fat-bergs’ (created when disposing of fat and other items down drains, including those 4.6 million single-use period products flushed down toilets every single day!), save people money, bring awareness to issues with chemicals in single use items, and remove barriers to some activities for example, swimming.
Tackling Period Poverty
On top of this, the partnership has put together a fund of £1000 to further help those struggling to afford period products, which affected increasing numbers during the COVID-19 pandemic. This money will be used to provide students on Pupil Premium Funding free reusable period products of their choice to ensure they too can access these products. If further funding can be gained, it is hoped to expand the scheme to schools beyond those who receive the training and to other residents in need through existing agencies such as food banks.
If reading this has inspired you to take action, there are several options available: • Engage with us on social media @HertsWasteAware • Buy some products via the discount scheme • Tell a school about the training available • Tell us which school it is so we can get in touch • Reach out if you have funding available to further tackle period poverty • Ask us a question to find out more Please email periods@hertfordshire.gov.uk or use the ‘ask us a question’ box at the bottom of the webpage.
