Chamber News

Reacting to the latest ONS labour market figures, Jane Gratton, Head of People Policy at the British Chambers of Commerce, said: “While it is positive to see unemployment remaining low, the labour market continues to be incredibly tight, bringing it with it additional problems and costs for employers. “Staff shortages continue to damage productivity, with many firms struggling to fulfil their order books and turning away new business. Fierce competition for skills, wage demands and candidates’ expectations leave many businesses with job vacancies they can’t fill. Together with broader inflationary pressures, it’s a perilous environment for business. “The Government must support more people back into work and create the right conditions for employers to invest in staff training and development.  Where firms cannot recruit and train from their local or national labour market, a flexible, efficient and affordable immigration system is crucial.”

The British Chambers of Commerce (BCC) upgrades its 2023 GDP forecast to 0.3%, but economic activity will remain weak throughout the year, according to the organisation’s latest Quarterly Economic Forecast.  

UK Economic Outlook    

The UK economy remains on course to avoid a technical recession. A growth rate of 0.3% is expected for the whole of 2023, rising slightly to 0.6% in 2024, and 1.0% in 2025. 

BCC’s programme of business surveys show that inflation remains the top concern for UK firms. The forecast for the CPI rate remains unchanged from the previous forecast at 5.0% in Q4 2023. 

Slight upwards revision to GDP 

In the short term, the BCC is expecting quarterly GDP to remain flat throughout 2023, with three quarters of 0.1% growth and one quarter of no growth – leading to overall growth of 0.3% for the year. This is in line with the Bank of England’s forecast, but more optimistic than the OBR’s. The BCC expects the economy to grow by 0.6% in 2024.  

The slight upwards revision from the BCC’s previous Q1 forecast of -0.3% to 0.3% is due to higher levels of household spending and recent increases in overall business investment. Evidence from recent BCC business surveys also showed a rebounding of business confidence at the start of 2023.  

However, despite greater political stability, stubbornly high inflation rates and labour market shortages continue to weigh on growth. Export activity fell back at the end of 2022 as global supply chain crises and trade barriers with the EU disproportionately impacted smaller exporters. Exports are likely to decline by 4.7% across 2023, a downwards revision from the previous forecast.  

The latest Quarterly Economic Survey shows a significant uptick in business confidence from 2022 levels. This is likely to result in increased investment, with the BCC now predicting business investment to grow by 1.3% in 2023, an upwards revision from the previously predicted level of 0.2%.   

Inflation forecast remains unchanged 

Inflation remains among the top concern for UK businesses, and the forecast for the CPI rate remains unchanged from the previous forecast of 5.0% in Q4 2023. It is expected to continue to slow, and drop below the Bank of England’s target, to 1.5% in Q4 2024.  

Average earnings are expected to grow by 4.5% in 2023 and will lag behind inflation until 2024 when they will increase by 2.6%.  

While energy and commodity prices begin to ease, core inflation remains stubborn. The Bank of England interest rate is expected to peak at 4.75% in the second half of 2023, higher than the previous forecast of 4.25%. It is expected to fall to 4% in 2024, and 3.75% in 2025. 

Modest revisions to investment and household spending, with Government spending contracting  

Overall investment is expected to increase by 0.7% in 2023, up from the previous forecast of -1.5%. Household consumption has also been revised upwards, from -0.4% to 0.2% for 2023. However, Government spending is expected to contract significantly by 4.1%, down from the previous prediction of 1.8% growth.  

The picture for 2024 is more uncertain, with investment predicted to contract by 0.4% in the year. General Government spending is also expected to contract again, this time by 1.9% across the year.  

Slight growth in unemployment rate 

The labour market is expected to remain tight as a record number of organisations report recruitment difficulties in the BCC’s business surveys, particularly in the hospitality, retail, and manufacturing sectors. However, some modest growth in the unemployment rate is expected, rising to 4.1% in 2023 and 4.4% in 2024 as the number of vacancies begins to fall. 

Commenting on the forecast, Vicky Pryce, Senior Member of the BCC Economic Advisory Council, said: 

“Today’s forecast from the BCC shows that we are on course to only narrowly avoid a recession. With anaemic growth rates predicted into the future, there is a real danger of slipping back into recession territory at any point.  

“The risk of recession creates greater uncertainty for firms, with the level of business investment likely to remain low despite Government support. These figures will give businesses little comfort, with some of the forecasts making for very concerning reading about the future state of our economy against a still challenging international environment.” 

David Bharier, Head of Research at the British Chambers of Commerce, said:   

“UK growth expectations have been upgraded slightly following the easing of political turbulence of 2022 and a rebounding of business confidence at the start of the year.  

“However, a high degree of uncertainty hangs over the UK economy. Most SMEs continue to report the toughest trading conditions in years, with stubbornly high inflation, record tightness in the labour market, and the creation of trade barriers with the EU. This amounts to very low levels of growth with our research showing that most firms are still not increasing their investment. 

“The current trajectory of anaemic growth is unlikely to change unless there are significant changes to the external environment, particularly in the ability of firms to recruit and export. Enabling firms to have greater access to the skilled people they need, reducing trade barriers, and creating a stable policy and tax environment will be essential to tapping into investment.”  

The British Chambers of Commerce (BCC) has announced a new Business Council, comprised of prominent UK business leaders, to design and drive the future of the British economy.   

The founding partners will be uniquely placed to shape the BCC’s policy and influencing, with the Council forming part of the organisation’s new national offer to businesses.  

Heathrow, Drax, IHG Hotels & Resorts and BP have joined the Council as the first founding partners. 

BCC Director General Shevaun Haviland and BCC President Baroness Martha Lane Fox will join a wider group of business leaders at a roundtable meeting in central London this afternoon (Monday 5^th June) to discuss the Council and the BCC’s new national offer.  

Shevaun Haviland, Director General, BCC, said:  

“Over the past few months, working closely with the Chamber Network, we have been talking to the nation’s largest corporates and it has become clear to us that they are looking for a different kind of representation.

“These businesses want to be part of a framework that’s rooted in their local communities, but with the ability to shape the national and international debate. 

“In response we have developed a new offer, the Business Council. I’m delighted to have Heathrow, Drax, IHG and BP join us as the first founding partners and look forward to speaking with potential members this afternoon at our roundtable event.  

“The Council is a long-term project and will bring together leaders from across UK industry to consider the key policy issues faced by British businesses, and work on Future of the Economy initiative, convened by our President, Baroness Martha Lane Fox. This initiative will focus on five challenges: Digital Revolution, People and Work, Net Zero, Global Britain and the High Street. 

“These challenges will form the backdrop to the next general election, which we know will come before the end of next year, and which everyone in Westminster is already gearing up for. The voice of business needs to be heard loud and clear, and now is the right time for us to speak up.”  

John Holland-Kaye, CEO, Heathrow, said: 

  “Over the last 10 years we have established a strong relationship with the British Chambers of Commerce and are delighted to be taking our partnership to the next level by joining their new Business Council as a proud founding member. 

  “As the UK’s only hub airport and largest port by value, we play a key role in facilitating trade and tourism, boosting UK exports, and connecting nations and regions to the rest of the world.  

“We want to continue growth in these areas and the Council will give us the opportunity to join fellow business leaders in identifying trends and challenges facing business and industry, ultimately shaping the BCC’s policy work and putting the right processes in place to drive change, alongside our longstanding partners.” 

Ross McKenzie, Interim Group Director of Corporate Affairs, Drax, said:    “We are proud of our long-standing and successful relationship with the British Chambers of Commerce. Joining their newly formed Business Council as a founding member is the next step in our journey with the organisation.    “We look forward to working with the BCC and other leading businesses through the Council to help tackle some of the key challenges facing the UK. This includes ensuring that the country has the right policies in place to deliver its Net Zero commitments.” 

Yasmin Diamond, Executive Vice President, Global Corporate Affairs, IHG Hotels & Resorts, said:  

“We are delighted to be working with the BCC as a founding member of the Business Council, which provides a new way to participate in the national policy debate and to discuss future challenges and opportunities for the UK economy. 

“The BCC’s Global Business Network will also enable us to connect with more than 75 markets around the world – an invaluable asset to our global organisation.” 

Louise Kingham, Head of Country UK & SVP Europe, BP, said: 

“BP is an active and long-standing member of both local and international chambers affiliated to the BCC. The UK needs to retain its international competitiveness and it is essential that the voice of business is heard.  We are therefore delighted to become a founding partner of the BCC’s new Business Council.”   

Business Climate Leaders (BCL) are working to help Norfolk businesses on their Net-Zero journeys, but we need to hear from you to do so. What are the biggest challenges facing your business and how can we help? BCL is about sharing knowledge and connecting businesses that can help each other achieve their Net-Zero goals, and by working together we can lobby for change on a greater scale. If you can spare a few minutes to give us your thoughts in this short survey we would really appreciate it – what you need is what we do, and by finding out exactly what you need we can make it easier to do what you need for our planet. Complete the survey here  

The British Chambers of Commerce (BCC) is launching a new Economic Advisory Council (EAC), to build on its Quarterly Economic Survey, and develop policies to get the economy and businesses growing. The Council will bring together a range of respected national, and international, economists and business leaders. It will provide expert advice and feedback to the BCC and its Chamber Network, with its work focused on the BCC’s long-standing and renowned programme of business research. Shevaun Haviland, Director General of the BCC, said: “We’re a year out on a General Election and now is a pivotal moment for business. That is why we have set up an Economic Advisory Council to help shape and guide our economic policies to boost the UK’s growth and prosperity. “We have been working on this for the past six months, and I’m thrilled to have such a diverse range of prominent economic and business experts join us at the BCC. “These people are national and global leaders in their fields, and they will help guide and shape our economic priorities and focus into the future. Our aim is to fuse the practical acumen of entrepreneurs with the technical expertise of economists to help produce policy that will make a real difference to the UK’s growth prospects. “The membership of the council reflects the diversity of our economy – with experts in the subject areas of financial services, logistics, trade, and taxation sitting on the EAC.” Vicky Pryce, Senior Member of the BCC Economic Advisory Council, said: “I am delighted to be joining the BCC’s Economic Advisory Council. Having previously worked with the BCC in an advisory role several years ago, it’s great to be back working with this brilliant organisation once again. “The BCC and its regional chambers play such an important role in assisting firms to navigate and succeed in a complicated and constantly changing economic landscape. “I am very much looking forward to assisting in bringing greater clarity on what is nowadays – and likely to remain for some time- a challenging economic environment for all.” EAC members include:

• Vicky Pryce – Former Head of Government Economics Service
• Ben Allen – Proposition Leader, Financial Sponsors and Executives – Coutts Bank
• Steven Gray OBE – UK Export Finance Representative, West & Central Africa
• Martin Shelford – Start-Up founder and business strategist
• Adam Uszpolewicz – Former CEO of Aviva-Poland
• Dame Teresa Graham – Former Deputy Chair of the Better Regulation Commission (BRC), Chair of the Administrative Burdens Advisory Board (HMRC), Chair of the UK Finance SME Advisory Group
• Mairi Spowage – Director, Fraser of Allander Institute
• Professor Dennis Novy – Professor of Economics, Warwick University

Reacting to the new UK-Australia and UK-New Zealand trade deals which entered into effect at midnight, Julie Austin, International Trade Quality Manager at Norfolk Chambers said:

“A new era of international trade will begin today as the first trade agreements agreed by the United Kingdom since it left the European Union come into force.  

“Combined bilateral trade with Australia and New Zealand amounts to over £15bn per year. Inward foreign direct investment from both countries into the UK is £16.6bn, and in the other direction represents a combined £42.1bn. 

“By 2035, the Australia deal could boost our economy by £2.3bn per year, and the New Zealand deal by £0.8bn, over the long-term, with benefits felt across the UK. 

“For UK firms exporting green goods and services to New Zealand, the agreement offers world leading terms. As the World Trade Organisation recently pointed out, if we get the right fundamentals in place, we can double green trade exports by 2030. 

“Of course, the success of any free trade agreement comes down to whether businesses use it and across the UK only 10% of firms are currently exporting. 

“If we are to realise the UK’s ambition to be at the forefront of the continuing revolution in life sciences, digital services and green innovation we must look to trade more. 

“A recent BCC survey found almost a quarter of firms (23%) said finding a business partner or distributor overseas would encourage them to either start exporting or export more.  

“There are strong Chambers of Commerce in both Australia and New Zealand that are affiliated to the BCC, and we will be working with them to get the most from these trade deals for all our economies. 

“Having those contacts, that local market understanding and full recognition of the rules and procedures that apply in a destination country can make all the difference between success and failure. 

“The message to any business thinking about selling goods and services to New Zealand and Australia is a simple one – there really is no better time to take the plunge.” 

  Details of the agreements can be found here: UK – Australia https://www.gov.uk/government/collections/uk-australia-free-trade-agreement Origin section https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1040533/uk-australia-free-trade-agreement-fta-chapter-4-rules-of-origin-and-origin-procedures.pdf UK-New Zealand https://www.gov.uk/government/collections/uk-new-zealand-free-trade-agreement Origin section https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1056253/uk-new-zealand-free-trade-agreement-chapter-3-rules-of-origin-and-origin-procedures.pdf

Trade sanctions seek to deny Russia access to the goods, technologies and revenue necessary to pursue its illegal war. The aim of this notice is to prevent the undermining of trade sanctions, export controls, and other restrictive measures designed and implemented in response to Russia’s invasion of Ukraine. Awareness of the risk and obligations in relation to sanctioned goods is an important first step for trade. Click here to read the Notice. All notices can be found through this link on Government website.

Reacting to the latest ONS inflation figures, David Bharier, Head of Research at the BCC, said: “Today’s CPI rate of 8.7% indicates that after several false starts, the peak in inflation looks to have passed. This is further evidenced by a significant slowdown in the producer price input rate to 3.9%. Falls in gas and electricity costs provided the largest downward contribution to CPI. “But this does not mean the problems caused by inflation will suddenly go away. Prices continue to rise from an already high base, after 18 months of price shocks. “The last year and a half has had a devastating impact on many small firms who were just starting to see activity bounce back following the removal of Covid restrictions. “With the interest rate currently at 4.5%, widespread skills shortages, and trade frictions on the rise, the cost of doing business is the highest in years. Action by the Government to help with the squeeze on the labour supply, reform of business rates and support on exports would go some way to helping them face the future with more confidence.” More detail on the ONS data can be found here.

Reacting to the release of the Government’s semi-conductor strategy, BCC Head of Trade, William Bain, said: “The fact the UK now has a National Semiconductor Strategy is a welcome first step. “We have been calling for this for the past year and it has arrived not a moment too soon to provide some focus, measurable actions and results. Business across the UK is clear on the imperative to secure long-term semiconductor supply chains for Britain – the foundation of advanced manufacturing here. “The recent semiconductor supply chain agreement with South Korea, and today’s new collaboration with Japan, are strong building blocks to provide greater security for manufacturing on diversity of semiconductor supply chains. “We also need strong engagement with the US and the EU who have adopted their own solutions to semiconductor supply chain challenges through their Chips Acts, including plans for increased internal semiconductor production. “The Strategy usefully puts together policies on R&D, skills and investment, with a domestic focus on compound semiconductors. “Keeping British industry at the cutting edge of research and development is vital and we will be engaging with Government on our role in contributing to the Strategy’s development and keenly focussing on the autumn announcements on infrastructure and additional manufacturing support.”

Yesterday saw our series of Focus Engagement Groups arrive in Dereham, we met at The George Hotel in Dereham town centre for another opportunity to hear what we can be doing to better support and give voice to every business in Norfolk. Our thanks go to our event sponsors, Upp, for their help and insight into the day’s discussions, as well as to the George Hotel for hosting us. Thanks also to Kelly Cartwright from Core Recruiter Ltd and  Katie Norwood, Account Manager. To start the discussion, the question of how ageing broadband infrastructure can impact business was raised by our sponsors, Upp. The consensus was that while technology can allow greater connectivity, more rural locations such as market towns and smaller villages can suffer from lack of availability, The point was raised how broadband speed and mobile phone signal plays a huge part not only for business leaders on deciding where to base their business but also homeowners, it was felt that it now is one of the first things people ask when buying a house. The other topic of discussion was on the lack of basic skills that is presenting in new employees, Soft skills are a major gap, from the very basics such as CV writing and understanding of Tax and national insurance through to more complicated issues like interpersonal skills. It is felt that Dereham is growing with new businesses opening in Rusher Green and new housing but the worry is can the infrastructure cope, Dereham is often gridlock. We were also told about the Konect Bus app which many of us were not aware of which not only is helpful for people to see when busses are coming but also helps parents give teenagers more freedom as they can see where the bus is just by looking at the app giving parents more peace of mind. Have your voice heard at your local Focus Group – see our upcoming groups here.

The Iraqi authorities have prohibited the below goods from being imported into Iraq. Juice | Ice cream products | Potato seeds | Urea fertilizer Fertilizers | Hatching eggs | Processed grease | Buffalo Sheep | Endangered animals | Piranha fish | Mince meats Animal parts | Animal protein | Horses | Predators’ animals Henna plant | Jet plant | Coconut plant | Straw plant Sugar cane | Fungi and Bacteria harmful to plants/soil | Poppy, Khat and Datura plants | Eichhornia plant Unpacked tobacco | Althaea plant | Palm plant | Mexican palm Cotton plant | All types of Citrus | Olive’s plant | Hibiscus plant Iranian apple plant | Grape plant | Dates | Honey Live chicken | Mango | Guava | Sugar apple If you have any questions regarding this or need support with exporting our International Trade team is on hand to help – find out more here.

Responding to the launch of the UK-Switzerland trade negotiations in Bern, BCC Head of Trade Policy, William Bain, said: “Business has been seeking a swift start to these important negotiations with Switzerland. It is the UK’s sixth largest export destination for services, worth £15bn per year, and our seventh largest export location for goods. Overall, 4.1% of total UK exports go to Switzerland. “The 2021 post-Brexit continuity agreement only rolled over terms on trade in goods but not services, so there has been a major gap to fill, affecting just under half of our trade. “As well as securing market access for our financial, legal, accounting, auditing, architecture and design service firms with the large Swiss market, we also need to make permanent the temporary services labour mobility and business travel rules agreed last year. “With scope to expand digital trade and bilateral data and investment flows with Switzerland, this is one of the most important sets of negotiations for business the UK Government has launched in the post-Brexit era.” More detail from the Dept of Business and Trade on the negotiations can be found here.