‘Big decisions’ on Brexit and the UK economy needed
● British Chambers of Commerce says clarity required to unleash ‘animal spirits’
UK business goes into 2018 with a gloomy overhang that government needs to address with clarity and vigour, warns a leading lobby group.
Dr Adam Marshall, director general of the British Chambers of Commerce, said in his New Year message yesterday that “we start the new year with below-par economic growth, stubborn inflation, low rates of business investment and far too few potential recruits for the many jobs on offer”.
Marshall gave warning that despite optimism at the country’s best businesses some big decisions lie ahead in the coming year, not least on the UK’S vexed withdrawal from the European Union.
“Getting the twin challenges of Brexit and the economic fundamentals right will require leadership, consistency and clarity – after a year in which business has been dismayed by what it sees as division and disorganisation across Westminster,” he said.
The BCC chief added: “Get those decisions wrong – or even worse duck them entirely – and we will ring in 2019 wondering why we are performing well below our potential at a crucial time.”
His comments come as the independent Office for Budget Responsibility has forecast that the UK economy will only grow at an average 1.4 per cent between now and 2021.
City economists have pointed to a continued stalling on investment by businesses worried about the implications of Brexit, consumer spending threatened by earnings trailing rising inflation, and in November the first rise in late UK interest rates in ten years.
Marshall said that if the government got it right on a domestic growth strategy in 2018 it could reinvigorate business confidence and stimulate exports and investment.
But he said that unleashing the “animal spirits” of British business this year required “clarity on Brexit” and “consistent, coherent leadership”, with the national interest prioritised over electoral interest.
“Businesses have been very patient in waiting for clarity on Brexit in the 18 months since the referendum. That patience is now wearing thin.
“Businesses want answers, they want clarity, and they want results,” Marshall said.
The BCC said its members and their EU trading partners wanted a swift “standstill” transition agreement as soon as possible in 2018 to stabilise short-term trading conditions, and ensure that businesses faced only one set of adjustment costs when the final UK-EU settlement was implemented.
If a transition deal was not agreed quickly, it would risk “contingency plans” being activated by UK businesses, investment flows delayed, and “a battening down of the hatches in far too many of our firms”.
However, Marshall said that a clear business agenda to support growth at home matters “just as much – if not more” than the negotiation of the UK’S exit from the single market, including superior broadband.