Chief Executive’s comment

CHIEF EXECUTIVE

Chief Executive’s comments

With this latest issue of connected magazine, Q2 comes to an end for 2022 and I wanted to take this opportunity to talk about what the latter half of this year will bring for business in the region. As you will likely be aware, the Cambridgeshire Chambers continue to support the British Chambers of Commerce (BCC) in lobbying for the government to take urgent action to address the cost of doing business crisis. Rising NI contributions, energy costs and surging inflation have left businesses with considerable feelings of uncertainty, and as such business investment has naturally waned. In the face of global economic shock, first from Covid and then from the conflict in Ukraine, businesses are struggling to absorb rising costs and have had little choice but to increase prices, or to make plans to do so in the near future. The impact of rising inflation and reduced consumer spending is already beginning to be seen in many of our most exposed sectors, including hospitality and leisure, and business investment is slowing down as many of us begin to talk of the likelihood of recession. The government need to put in place support for businesses that is stable and reliable, to give businesses the confidence to invest and drive growth. The BCC have been pushing constructive conversations with government to review capital allowances amongst other policies to incentivise business investment. Taking measures now to improve business confidence is desperately needed to ensure that investment is made to support the growth that our economy needs. What support would you like to see put in place? Let us know by emailing chamber@cambscci. co.uk and we’ll share your suggestion with the BCC but also the relevant local authorities for more local support.

Vic Annells Chief Executive

Key points from the British Chambers of Commerce economic forecast for June:

l UK GDP growth forecast for 2022 is 3.5%, 0.6% in 2023 and 1.2% in 2024 l Following Q1 2022 growth of 0.8%, quarter-on-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 l Household consumption forecast is for growth of 4% in 2022, growth of 0.6% for 2023 and 1.2% in 2024 l 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 l 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% l BCC expects UK unemployment rate of 3.8% in 2022, 3.9% in 2023 and 2024 l 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 l 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.