Commenting on the inflation statistics for June 2017, published today by the Office for National Statistics, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“While the fall in inflation in June will surprise many, consumer price growth is likely to resume its upward trend in the coming months, with the elevated cost of imported raw materials still filtering through supply chains. Falling prices for motor fuels were the main driver behind the fall in the inflation rate last month.
“Inflation remains a major risk to the UK’s growth prospects this year, with rising cost pressures for both consumers and businesses likely to dampen overall economic activity.
“However, it remains likely that the current spell of high inflation will be relatively short lived with moderating price growth at the factory gate indicating that inflationary pressures in the supply chain are starting to ease. If this trend continues as we expect, inflation is likely to peak sooner rather than later. While still close to historic highs, the BCC’s latest Quarterly Economic Survey revealed that the balance of firms expecting prices to rise over the next year did weaken in Q2.
“We currently expect that inflation will peak at 3.4% by end of the 2017, before easing back in subsequent years as the impact of the post-EU referendum slide in sterling drops out of the calculation.
“With UK economic conditions softening, it is crucial that the MPC holds its nerve on interest rates, particularly during this period of heightened political uncertainty. Raising rates too early could undermine consumer and business confidence, stifling UK growth further. More must also be done to ease the burden of high upfront business costs which continue to impede firm’s ability to invest, recruit and grow.”
Stands are booking fast at the B2B Exhibition, which returns to Norwich City Football Club on Thursday 12 October 2017. Only 25% of exhibition stands are remaining with just 4 spaces left at the ‘Top of the Terrace’ level.
Building on its continued success year on year the B2B Exhibition is a key event in Norfolk’s commercial calendar that gives exhibitors unique access to network with a range of businesses and promote their products and services to the Norfolk Business community. Last year’s event sold out with over 100 exhibitors and more than 750 visitors and this year is shaping up to be even bigger!
To find out more about exhibiting or to book your stand, visit the event webpage or contact a member of the events team on 01603 625977.
Just 2% of more than 2400 companies think that leaving the EU without a trade deal should be a realistic option for the UK’s Brexit negotiators.
Responses to a survey by the British Chambers of Commerce (BCC) reveal that remaining in the Single Market and Customs Union is still the most popular option, with 34% of those surveyed supporting it.
Achieving a comprehensive Free Trade Agreement (FTA) and a customs agreement was favoured by 28% of respondents, while 13% supported remaining in the Customs Union only, and 11% wanted to stay just in the Single Market.
As mentioned above, the option of the UK leaving the Single Market and Customs Union and rely on World Trade Organization (WTO) rules for trade was supported by just 2% of the 2422 businesses interviewed.
Participants were also asked about a transition period – specifically which of the following options would be best for their business: a transition period of three years (supported by 46%); a transition period of longer than three years (22%) or no transition period (17%).
Giving his view on the findings, Dr Adam Marshall of the BCC said that, while they make it clear that there are a range of business views on what the UK should be seeking in a final deal with the EU, “there is near-universal consensus that a deep and comprehensive agreement is needed”.
Coming away with no deal is not seen as a viable option, he added, as businesses want a pragmatic settlement on the practical, real-world issues that affect their operations, not arbitrary political red lines.
Getting transition arrangements on the negotiations agenda as quickly as possible would give businesses the confidence to press ahead with investment decisions, Mr Marshall suggested.
As reported last week (Support grows for EU-Japan deal), a fair wind was growing behind the proposed EU-Japan Economic Partnership Agreement/Free Trade Agreement (EPA/FTA).
Now the two sides have reached an “agreement in principle” on the main elements of an EPA, described by the European Commission as the most important bilateral trade agreement ever concluded by the EU.
As such, for the first time, a specific commitment to the Paris climate agreement has been included.
For the EU Member States, the new agreement will remove the vast majority of duties paid by their companies, which add up to €1 billion annually, open the Japanese market to key EU agricultural exports and increase opportunities in a range of sectors.
The EPA sets the highest standards of labour, safety, environmental and consumer protection, fully safeguards public services and has a dedicated chapter on sustainable development, the Commission has pointed out.
EU Trade Commissioner Cecilia Malmström said that it demonstrated that the EU and Japan, democratic and open global partners, believe in free trade.
Among other provisions, the agreement scraps duties on many cheeses such as Gouda and Cheddar (which currently stand at 29.8%) as well as on wine exports (currently at 15% on average).
“Based on today’s agreement in principle,” the Commission explained, “negotiators from both sides will continue their work to resolve all the remaining technical issues and conclude a final text of the agreement by the end of the year.”
As we reported last month, Saudi Arabia, the United Arab Emirates (UAE), Egypt and Bahrain have broken diplomatic ties with Qatar claiming that it supported terrorist and sectarian groups.
Effectively blockading the Gulf State, the coalition of countries demanded that Qatar close the broadcaster Al Jazeera, scale back co-operation with Iran, remove Turkish troops from its soil and end contact with groups such as the Muslim Brotherhood.
Despite being faced with the threat of further economic sanctions as the deadline set for its response was first extended and then passed, Qatar rejected all 13 demands.
With Qatar’s border with Saudi Arabia being its sole land link to the rest of the world, and a key route for food imports, the country has been relying on Turkey and Iran delivering supplies.
However, energy exports from Qatar, which is the world’s biggest exporter of liquefied natural gas, have not been affected.
Speaking in London, the Qatari Minister of Foreign Affairs, Sheikh Mohammed bin Abdulrahman Al Thani, said: “What we’ve done in the last few weeks is develop different alternative for ways to ensure the supply chain for the country not to be cut off.”
He poured scorn on threats to expel Qatar from the trade and security bloc, the Gulf Cooperation Council (GCC) arguing that decisions could only be taken by the GCC by consensus and suggesting that not all the members would support the Saudi and UAE call.
Qatar’s Trade and Economy Minister, Sheikh Ahmed bin Jassim Al Thani, said: “All supply chains, either by air or sea are working smoothly – it’s business as usual.”
European exporters reported a 10% increase in the number of trade barriers they encountered last year.
A new report from the European Commission reveals that 372 such barriers were in place at the end of 2016 in more than 50 global trade destinations. Of those, 36 obstacles were created during the year.
According to the Report on Trade and Investment Barriers (available at trade.ec.europa.eu), those newly created barriers could affect EU exports currently worth some €27 billion.
The latest annual report highlights barriers to trade spanning a wide range of products, from agri-food to shipbuilding.
It shows that Russia, Brazil, China and India top the list of G20 members that have created the most obstacles to imports. The majority of protectionist measures reported in 2016 were introduced by Russia, India, Switzerland, China, Algeria and Egypt.
On a more positive note, using its Market Access Strategy, the Commission succeeded in removing 20 different obstacles identified as hindering European exports.
South Korea, China, Israel and Ukraine were the countries with which the EU was most successful in negotiations to restore normal trading conditions. The food and drink, automotive and cosmetics sectors benefited the most from the Commission’s actions.
Examples cited include China suspending labelling requirements that would otherwise affect the €680 million of EU cosmetics exports and South Korea agreeing to bring its rules for the size of car seats into line with international standards.
Warning that the scourge of protectionism is on the rise, EU Trade Commissioner Cecilia Malmström described as worrying the fact that G20 countries are maintaining the highest number of trade barriers.
At the upcoming G20 Summit in Hamburg, the EU will urge leaders to resist protectionism, she promised.
Bangladesh, Ethiopia, Haiti and Sierra Leone are among 48 countries that will continue to benefit from duty-free exports into the UK after Brexit.
The Government has confirmed its intention to maintain the EU’s “Everything But Arms” initiative, which helps selected countries trade all goods other than arms and ammunition.
Not only will the countries currently benefiting from duty-free exports into the UK continue to do so, but a post-Brexit Government will also explore options for expanding relationships with additional developing countries, such as Ghana, Jamaica and Pakistan.
In a joint announcement, International Trade Secretary Dr Liam Fox and International Development Secretary Priti Patel highlighted the role that trade can play in combating poverty.
Free and fair trade has been the greatest liberator of the world’s poor, Dr Fox suggested, adding that the Government’s announcement shows its commitment to helping developing countries expand their economies and reduce poverty through trade.
By helping these countries to harness the formidable power of trade, not only is the UK creating trading partners of the future for its businesses, but it is supporting jobs at home, Ms Patel argued.
Building a more prosperous world and supporting our own long-term economic security is firmly in everyone’s interest, she added.
The UK currently imports some £20 billion of goods per year from the developing countries concerned. That equates to about half of clothing and a quarter of coffee and other everyday goods such as cocoa, bananas and roses.
In the Government’s view, without sustained economic growth and the jobs associated with it, a whole generation in the poorest countries of the world could be consigned to a future where opportunities are out of reach.
That could, it argues, potentially fuel instability and mass migration – which could have consequences for the UK.
Great Northern/Thameslink are currently consulting rail passengers about the rail service from King’s Lynn to London Kings Cross.
The new timetable will go live in May 2018. Great Northern have already updated services based on feedback from nearly 13,000 customers in Phase 1 the consultation process. They are now consulting passengers on the Phase 2 of the consultation process.
The full Phase 2 Consultation paper can be viewed here. The relevant pages for King’s Lynn passengers starts on Page 34.
Commenting on the proposed new timetable, Nova Fairbank, Public Affairs Manager for Norfolk Chamber said:
“From the information available, it appears that trains will continue to run every hour, with a half hour service at peak times. But there still appears to be no relief from the overcrowding on the onward services, north of Cambridge – particularly in the afternoon peak, such as on the current 16.44 from King’s Cross. Some of this over-crowding will reduce once the eight car trains are introduced. Similarly, no Saturday or Sunday timetables are included, so no comments can be made about the weekend service. In addition, the new timetable adds approximately 10 minutes to King’s Lynn to London journey times – this has the potential to impact on businesses. The Department for Transport has previously valued business travel time at about £50 per hour, so with an added 20 minutes on a round trip from King’s Lynn to London, the added social cost to business of each journey made is over £15.00.”
Ensure you get your views heard on the rail service from King’s Lynn to London by either:
Across nearly all districts of Norfolk, levels of unemployment fell in June. Overall, the claimant count for Norfolk stood at 7,960, which was a drop of 320 claimants from the previous month. Norfolk is currently ranked 13th in a table of local authorities in the East and south East.
Every district except Broadland recorded a fall in their claimant count rate. Norwich recorded the largest fall in claimant numbers with a drop of 5.7%. King’s Lynn and West Norfolk saw a 2.8% decrease – a better result than the previous month. From a Great Yarmouth perspective, it continued a worrying trend from the previous month with a lack of a strong downward trend in claimant numbers. Their claimant count stands at 2,895 from a total of 2,960 last month.
Ordinarily it is expected that the Great Yarmouth claimant count falls drastically in the summer months, given the local job market’s seasonal pattern. Some on this anomaly can probably be assigned to the shift to full implementation of the Universal Credit, however a continuing trend would be a greater concern.
The British Chambers of Commerce (BCC) today (Thursday) publishes its Quarterly Economic Survey – the UK’s largest and most authoritative private-sector business survey. Based on the responses of over 7,700 businesses in Q2 2017, the results for both sectors indicate that the UK economy grew at a subdued rate in the second quarter of 2017.
The Norfolk services sector, a key driver of economic growth, saw indicators of domestic activity, employment and investment continue to weaken slightly in the quarter. Consumer-facing industries such as retail outlets and hotels reported weaker growth rates compared to B2B businesses in the quarter.
The survey shows Norfolk export sales and orders in the manufacturing sector falling from the previous quarter. Whilst services sector exports remained a mixed picture, with export sales increasing marginally but export orders falling by 4 points.
The balance of Norfolk firms expecting prices to rise has decreased across both sectors, but the percentage of firms reporting concern over raw material costs and pay settlements has risen.
The findings indicate that while confidence in future turnover decreased, the effect could be short-term, as confidence in overall profitability improved. Both sectors showed an increase of investment in training.
Key Norfolk findings in the Q2 2017 survey:
Overall, the figures for both sectors indicate static growth
The percentage balance of manufacturing firms expecting the price of their goods to increase over the next three months has fallen slightly from the near-historic-highs reported in the previous quarter (from +55 to +33), and fell in services from +39 to +29
However, manufacturers report continued pressure from the price of raw materials, with +82 reporting this as the cause of price increases (up from +68). Pressure from pay settlements also rose in both, rising from +20 to +27 in manufacturing and +21 to +49 in services
In the manufacturing sector, the balance of firms reporting increasing domestic sales rose slightly from +9 to +12, as did domestic orders from +6 to +10. The balance reporting export sales fell from +17 to +11 and export orders fell from +20 to +7
In services, the balance of firms reporting increasing domestic sales remained static and domestic orders fell from +13 to +8. The balance reporting increasing export sales rose from +6 to +13 but export orders fell from +4 to 0
The percentage of businesses in the manufacturing sector attempting to recruit fell somewhat but remain relatively high at 68%. Whilst the service sector increase slightly to 65% (up from 60%). Of those, the percentage of firms facing recruitment difficulties dropped but remains high in both sectors at 63% (down from 83%) in manufacturing and 67% in services (down from 81%)
Confidence across the board dipped in the second quarter. The balance of manufacturers confident that turnover would improve over the next 12 months fell from +35 to +23, and the balance for services from +42 to +31. The balance of manufacturing firms confident that profitability would increase remained static but in services rose slightly from +19 to +21
However, the balance of firms in both sectors reporting improved cashflow remains at historical lows, with manufacturing continuing to fall into negative territory from +2 to -15, whilst in services it rose from -6 to 0.
Commenting on the results, Chris Sargisson, Chief Executive of Norfolk Chamber said:
“The latest survey results, which reflect the outlook of companies in all sectors and locations across Norfolk, indicate that for many businesses growth is static at best, and at worst, beginning to slow.
“It’s time for the economy to be put back at the heart of the agenda, with a focus on creating the best possible environment for business growth all across the county. Government must play its part by tackling the issues that hold businesses back, including labour shortages, weaknesses in our physical and digital infrastructure, and high upfront costs which dampen investment intentions and firms’ growth potential. Any talk of higher business taxes to pay for politically-motivated spending must be quashed swiftly, to avoid undermining business confidence further.
“The subdued growth picture also underlines the importance of getting as much clarity on the Brexit transition as possible, as quickly as possible over the coming months.”
Nova Fairbank, Public Affairs Manager for Norfolk Chamber, said:
“The latest survey indicates that Norfolk’s economic activity remains subdued in the second quarter of 2017.
“The services sector activity stuttered a little with a number of the key balances weakening this quarter. Consumer-focused industries were the worst performers – further evidence that rising inflation is dampening their activity. Norfolk’s manufacturing results saw a definite slow-down and the longer-term trends suggests that the manufacturing sector’s contribution to overall growth will not be enough to offset weaknesses elsewhere.
“Rising inflation remains the key challenge for the Norfolk economy this year. Consumer prices are likely to keep rising in the coming months as the recent sizeable increases in the cost of raw materials, pay settlements and other overheads filter through supply chains.”
Preventing Discrimination in the Workplace Our forthcoming HF Forum, sponsored and delivered by Steeles Law, will focus on preventing discrimination in the workplace.
Seven years on from the Equality Act 2010, the employment law team from Steeles Law look at how the law has developed in this area, providing practical tips for ensuring equality and diversity in the workplace and avoiding costly claims in this sensitive area of HR management. This session will be delivered by expert speakers, Oliver Brabbins Director and Head of Employment and Robert Hickford, an Associate Solicitor at the firm.
The session will also cover essential recent and forthcoming developments in employment law including: Brexit’s impact on employment law – what we know so far; and a round-up of case law developments.
Norfolk Chamber members can book now for just £25+VAT.