Partner Tim Clark, in our Employment Law team, looks at why the Bank of England's latest forecast and the annual Good Growth for Cities Index may provide business owners in the Thames Valley with some better news.
There have been times during the past year when good news has seemed in short supply, if not entirely absent, but two items shared last week may provide businesses based in and around the Thames Valley with welcome boost.
The Bank of England’s Monetary Policy Report
As the Bank of England voted to hold interest rates at 0.1%, it predicted that economic growth will "recover rapidly" in 2021, thanks to increasing consumer confidence and spending as a result of the vaccination programme that has so far been so successful.
The Bank’s Monetary Policy Report for February suggests that GDP increased in the final quarter of last year, to a level around 8% below that of 12 months earlier. It described the outcome as “materially stronger than expected” in its November report.
In the current first quarter, the Bank predicts a fall in GDP of 4%, forecasting that the impact will not be as severe as that seen during the first national lockdown last spring.
The Report suggested that whilst an immediate rise in unemployment may not be on the horizon, with the “Furlough Scheme” set to run until 30 April, it does still predict a rise to 7.8% (from the current level of 5%). To provide some context, following the “financial crisis” in 2008, unemployment rose from the same level of 5% to a peak of 10% in October that year.
Despite the more positive news, the report did caution that “The outlook for the economy remains unusually uncertain. It depends on the evolution of the pandemic, measures taken to protect public health, and how households, businesses and financial markets respond to these developments.”
The Good Growth for Cities Index
PWC/Demos’ newly published Good Growth for Cities report ranks Reading second only to nearby Oxford in a list of UK cities best placed to withstand the economic shock resulting from the pandemic, and to stage a strong recovery.
The index is based on Reading’s sustained success in recent years when it comes to job and business creation, income levels, quality of life, health and having a skilled workforce.
It says that Reading has been comparatively less affected than many areas of the UK, ranking it 10th in the country.
Employment data shows that furlough leave has been much more restricted than in some areas of the country, whilst job vacancy rates in certain key sectors remain strong.
Beyond that, unlike the 2008 financial crisis when capital investment largely fell away, activity is still planned but paused.
How we can help your business
Like any period of rapid change and economic uncertainty, the ongoing situation has resulted in and will continue to offer significant opportunities as well as challenges for businesses and their owners and management teams.
We aim to establish a strong professional relationship and understanding with our clients from the outset with a view to working with them over the long-term to help their businesses to identify and capitalise on opportunities and grow, whilst protecting against the risks posed by the challenges.
Whether a business is looking to renegotiate and update key commercial contracts or to restructure its workforce, reassessing its property needs or faced with a dispute, our specialist lawyers have the expertise and experience to help.
For further information or legal advice, please contact firstname.lastname@example.org or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.