Since 2022, as the Russia-Ukraine geopolitical crisis has heightened the UK economy is receiving severe blows one after another, and it does not seem to stop in 2023. While inflation drove up to 11%, and the UK hit the cost-of-living crisis of a generation, employees, and demanding higher pay raise for sustenance. However, in near future, employees may be out of jobs, and manufacturers can lose investors reaching a new economic low.
Manufacturers warn of UK’s reducing competitive edge, fears lesser investments:
Once an attractive investment market, the UK is failing to hold the interest of investors any longer. It is losing its competitive edge and so the ability to attract new investments, as reported by manufacturers. On Monday a new industry survey was released by Make UK, the main trade body for British manufacturers, and accountants PwC that shows 43% said Britain had become less attractive to overseas investors. The industry group represents 20,000 UK manufacturers.
Furthermore, only 31% believe Britain is a competitive location for business. Previously the number was 63% in 2022. Between November 1 and November 22, 2022, 235 businesses participated in the survey, and 53% revealed that the ongoing political instability was impairing their business confidence. It was the same time as Lizz Truss’s brief political stint.
Unemployment on the horizon for UK industries as energy costs rise:
UK residents are finding it hard to make ends meet as gas prices, energy prices, and the cost of living is constantly rising. Christmas 2022 was challenging for several households in the UK due to rising food inflation as reported by The British Retail Consortium chief executive, Helen Dickinson. However, the situation is turning grimmer since UK manufacturers are anticipating layoffs and job losses due to soaring energy costs. They are also considering putting off production.
Although the government is extending support to the industries, many believe it is not sufficient to save a business from shutting down. This week, Chancellor of the Exchequer Jeremy Hunt is due to confirm how much the government will cut its energy aid for companies. The Treasury says that it is unsustainably expensive.
Energy subsidy cuts can lead to blackouts, UK manufacturers opine:
Experts believe that the UK economy will experience a new level of hurt as the government plans to pull back financial support from businesses in the face of a crisis. They believe the winter months are heading for blackouts as the announcements are due and energy prices are skyrocketing.
Make UK survey unveiled that as many as 60% of bosses increasingly grew concerned about blackouts affecting their business, while almost 64% said higher energy costs posed the biggest risk to their company. Additionally, more than 13% of companies are considering implementing shutdowns, with more than one-in-10 considering relocating production to another country where energy costs are cheaper.
No promises of inflation to fall in 2023, need more discipline: British Prime Minister Rishi Sunak:
In a recent interview, British Prime Minister Rishi Sunak said that it is not given or guaranteed that inflation to go down this year. However, the government needs to be disciplined and should stick to a responsible policy on pay. As trouble ensued, in the first few days of 2023, the UK was posed with rail strikes and employees demanding pay rises to combat the cost-of-living-crisis.
However, the government is not ready to bow down to the demands and is more willing to talk about public-sector wage settlements for 2023-24. Some protestors are also angered as the Sunak government plans to bring in new legislation enforcing minimum service levels during strikes.