BCC cuts growth forecast
The British Chambers of Commerce (BCC) has reduced its GDP growth forecast from 2.2% to 1.8% in 2016, from 2.3% to 1.0% in 2017, and 2.4% to 1.8% in 2018.
Uncertainty surrounding the long-term arrangements with the EU has been a contributing factor in reducing growth as well as lower consumer spending and falling investment.
Dr Adam Marshall, acting director general of BCC, said:
“Stability, clarity and action must continue to be the watchwords for government. Aside from a clear timetable for negotiations with the EU, ministers must act to support business investment and confidence.”
Migrant entrepreneurs to help boost Brexit
The government has been urged to support job-creating migrant entrepreneurs. The Institute of Directors (IoD) report on migrant entrepreneurship in the UK found that foreign entrepreneurs plan to employ native born workers or planning to do so in the future.
However challenges around networking, contacts and government support schemes continue to be problematic with migrants unaware of schemes and advice used by native-born entrepreneurs.
Imon Walker, Director General of the IoD, said:
“As we move towards our departure from the European Union and rewrite our immigration policy, ensuring that we are still open to those who want to grow their businesses in the UK will be absolutely crucial.”
EU workers express concern over residency
Over two fifths of EU employees in the UK have expressed concern of their residency status following the Brexit result in June.
800 businesses who currently have EU workers as their staff surveyed reported that 5% have seen employees resign following the EU referendum, while 10% have seen employees state their intention to leave the UK.
Adam Marshall, BCC acting director general, said:
“These hardworking people are absolutely vital to the success of businesses, and must be retained – we cannot afford to lose talented and skilled workers.”
Interest rates unchanged
The Bank of England (BoE) has voted to maintain interest rates at 0.25% but said it could cut rates again in the coming months.
BoE has also voted to continue the £60 billion government bond purchases programme to take the stock of purchases to £435 billion.
Tom Stevenson, investment director for Personal Investing at Fidelity International, commented:
“With interest rates remaining at record lows, UK savers are unlikely to achieve a decent return by staying in cash.
“To stand any chance of generating a real return they’ll need to look further up the risk spectrum, investing in slightly riskier bonds issued by companies rather than the government or moving into stocks and shares.”