Sluggish growth is holding back North

WHOEVER wins this year’s general election, one of the most pressing issues they must address is sluggish economic growth, especially here in the North where it is acting as a brake on our region’s ability to prosper.

The impact of a lack of growth is set out in today’s report by KPMG and REC UK, which finds businesses in the North are recruiting fewer people. This is bad news for companies, for the young hoping to build rewarding careers and for the region as a whole.

It is indicative, as the report says, of business being stuck in a holding pattern where there is caution about investing.

This is understandable given an economic outlook that remains uncertain, but it is holding the north back at a time when we already face more than enough obstacles to building prosperity because of a lack of Government investment.

The message from companies to the report’s authors is that interest rates need to come down in order to encourage investment. And this presents a problem for both the Bank of England and the Government, who worry that a rate cut could push inflation back up at a point when it is falling.

That would be politically harmful for the Conservatives, who will undoubtedly fight the election on a platform of being sounder on economic management than Labour.

But northern companies – and the regional economy they drive – cannot be left stuck because of uncertainty over whether it is prudent to invest. Ministers and the Bank of England must take heed of what businesses are saying, and create the economic conditions for them to move forward.