We are all waiting to see what effects Brexit will have on the UK economy. Recent, generalised stats issued by our government seem to promote the idea that it’s “steady as you go” progress.
However, with the pound under increasing downward pressure against other currencies the increased costs of imported goods seem to be exerting an upwards influence on prices. As a result, inflation seems to be on the increase. If this trend continues the Bank of England will no doubt, consider interest rate hikes. In turn that will reduce the ability of households and businesses to invest and consume.
And in Wales and the north east of England, property prices fell in August 2016.
How will these indicators impact our clients? If we all rush to protect hard-earned cash reserves and adopt a wait and see approach, will this exert a further downward influence on investment and activity?
Philip Hammond and his team will be hard at it, shaping and reshaping the autumn statement. Will we see more austerity or will our new Chancellor take up the challenge and encourage investment, perhaps in infrastructure or “green” technologies?
It is some eight years since the last major economic crisis created by the global banking system forced many of our small business clients onto the back foot. Let’s hope we will not be revisiting that scenario.