Autumn statement a crucial moment for future stability of UK economy, says IOE and IT director general

Wed 16 Nov 2022
Posted by: Marco Forgione
IOE News

Marco Forgione - Parliament

Commenting ahead of the Autumn Statement this Thursday, Marco Forgione, director general of the Institute of Export & International Trade has told the IOE&IT Daily Update:

“The Autumn Statement this Thursday is a crucial moment for the future of the UK economy. There is no room for error here. This is underlined by the release today of the latest UK inflation figures showing that inflation is at 11.1%, its highest rate since 1981. With the UK also predicted to enter a recession at the end of the year, there are businesses up and down the country who will be watching today’s inflation news with real worry.

“Our members, like the vast majority of UK businesses, are already experiencing significant economic challenge as they navigate supply chains impacted by inflationary pressures as well as grappling with rising energy costs. While we recognise the difficult balancing act the chancellor will need to navigate, as he seeks to restore investor confidence in our public finances, it is vital that he does not impede the ability of UK businesses to trade. 

“The Institute’s monthly Exporter Monitor shows that, each month, more and more businesses are stopping trading internationally. This was echoed in November’s manufacturing sector report which reported a reduction in both new orders and output volumes over the past quarter and anticipates further drops in output as we head towards the New Year.

“This decline is having a real impact on the government’s ‘Levelling Up’ agenda because the number of companies trading internationally is in decline across every nation and region of the UK. In the UK as a whole, this amounts to -1.9%.

“In Northern Ireland the number of businesses exporting has dropped by 3.6% between Q2 and Q3 of this year. Scotland has also seen exporter numbers drop by 1.2%. Over the same period of time, there have been the following fluctuations regionally: North East 0.4% increase, North West 0.5% increase, South West -1.9% decrease, South East 0.4% increase, West Midlands -1.6% decrease, East Anglia -1.2% decrease, Yorkshire and Humber 0.5% increase. This kind of decline will inevitably impact on local communities.

“Reports from our members suggest many businesses are struggling to find employees, particularly those with the right skills for the jobs available. This is partially reflective of the skills crisis that we are facing in the UK and the effects of fiscal-drag impacting low-paid workers.

“The chancellor must make it clear through his measures that the UK will remain an attractive proposition for foreign direct investment. This is particularly important in a context where ONS figures released last week show that UK business investment is now 8.4% below its pre-pandemic levels.

“As the government plans for growth it is important that there is a focus on growing sustainable trade. Investment and encouragement of the UK land-bridge along the central corridor will spur trade and has been shown to significantly reduce CO2 emissions.

“Finally, we want economic recovery to be an export-led, which means taking the decisions to help hard-pressed businesses, particularly SMEs, in every region of the UK to take advantage of the benefits of free trade agreements.”