Act now as fears of a recession grow
TheUKisoncoursetoslump into a recession later this year, a business expert in the county has warned.
And they fear that could sound the death knell for many of the county’s small and medium sized firms.
As the inflation rate soared to a 40-year high of 9% the cost of living crisis is expected to worsen later this year when energy costs rise yet again in the autumn.
With businesses hit by increased costs and the prospect of a collective reduction in spending by consumers, economic activity is set to take a hit.
Rick Schofield is a partner at the Ashford offices of accountants and business advisory group Azets UK. He explains: “For firms which deal with other businesses, it’s not the end of the world for them, as most of them will pass the increased costs on.
“Those that deal with customers - such as retail and hospitality - that’s a complete nightmare for them. We’re all thinking do we need to spend this, should I save a bit more? So those hit by Covid are now getting hit again.
“You can either increase the prices - and many are trying to do that - and then think about saving your costs to keep yourself viable.
“And that then has a horrible implication that we could end up going into recession.
“Unfortunately towards the end of the year I can see a recession happening. People are going to stop spending money. It’s all going to spiral downwards.“Hopefully it will be short this time, inflation [currently] is pre-dominantly caused by fuel; that will come back relatively quickly.
“Unfortunately I think we’ll see more firms in Kent forced to close down. There will be lots of businesses that will struggle.”