Your Weekly Key Messages: 23rd Dec
Business Must Be Key Part of Devolution Plans
On Monday, the Deputy Prime Minister Angela Rayner unveiled the White Paper on English Devolution. It proposed abolishing district councils and introducing more large mayoral combined authorities. Our Policy Manager Jonny Haseldine told journalists:
“More devolution to communities across England is something business will welcome if it helps drive forward local economic growth. Delivery is key.
“As local leaders get more powers it’s vital that businesses are always at the table helping to mould policy. That must include shaping local growth plans and helping to deliver the industrial strategy.
“As many of our Chambers are already coordinating Local Skills Improvement Plans (LSIPs) effectively, we will be looking for more clarity on how the proposal for joint ownership will work in practice.”
Click here to read the full press release.
Wage Pressure A Headache For Firms
The latest labour market data published on Tuesday showed that pay growth has picked up for the first time in more than a year. ONS data showed regular pay grew at a faster than expected annual pace of 5.2% between August and October.
Responding to the data our Deputy Director Public Policy Jane Gratton said:
“News that wages have been rising faster will be a concern for businesses as they continue to grapple with the huge increase in employment costs announced in the autumn Budget. The unemployment rate ticked up slightly, showing ongoing challenges in the labour market.
“Higher employer National Insurance Contributions and an increase in the national living wage from next April, means firms are facing difficult decisions. Many say they will have to raise prices, put recruitment and investment plans on hold and look for other ways to reduce their costs.”
Click here to read the full press release.
Inflation Jumps as Businesses Face Mounting Costs
On Wednesday we heard that prices in the UK went up by 2.6% in the 12 months to November, the highest level for eight months. It means inflation has been above the Bank of England's target for two months in a row.
Our Head of Research, David Bharier, told the media:
“A slight ticking-up of the CPI to 2.6% shows that inflation remains a threat to the UK economy. The Bank of England is likely to remain cautious and hold the interest rate tomorrow lunchtime.
“Our research shows that taxation and inflation remain the top two concerns for businesses. Many businesses think the recent announcements such as the NICs increase, and Employment Rights Bill will lead them to increase their prices as they struggle to manage input costs.
“Our latest forecast expects CPI to remain above the Bank of England’s target until the end of 2026, mainly due to increased business costs and global trade uncertainty.
Click here to read the full press release.