With so much going on economically and politically, times are incredibly challenging, and with government needing to make some difficult decisions ahead, with no easy choice; How can macro-economic stability be restored? Why is stability a pre-condition to growth? Why is growth the long-term answer?
Earlier in the year we set out our vision for growth in the UK, little did we know that only a few weeks on, we would be have experienced such levels of political and economic instability.
As we continue to restore market stability and confidence, it is essential we don't lose sight of the direct impact it has had on households, as well as businesses. Instability has driven up interest rates on mortgages and lending, it has hampered corporate decision-making, and ultimately hit livelihoods. And let’s be very clear – without stability firms will struggle to invest, we’ll have no way to bring down debt other than turning to tax rises and spending cuts, and growth will be much weaker.
Restoring macroeconomic stability remains the number-one priority right now. It's not about about politics, it's a necessity, stability is a precondition for economic growth.
We saw the Chancellor, Jeremy Hunt, acting quickly and firmly to allay market concerns, it was a welcome first step in restoring market confidence – as was the commitment to set out a full and credible medium-term fiscal plan with OBR forecast on 17 November. What happens next is vital for our ability to get back to going for growth in 2023.
We need to get back to putting concrete plans in place for growth
Seize the Moment identified £700bn of prizes that are, with government support, well within reach – in green growth, in innovation, in trade and by focusing on workforce skills and high-growth sectors like financial services, professional services, healthcare and life sciences. Those haven’t gone away. Every day, we’re hearing from members across the UK that they still have projects they want to invest in, and they still have access to capital to back them. But will they press go? The answer is clear – only when there is stability. If we don’t act soon, that money can and will go elsewhere – and so we’ll fall behind in the global race for growth. None of us can afford to wait out the turmoil. Instead, we must focus on what we can control.
What is next?
With a new Prime Minister and Chancellor, all eyes are now on the 17 November, when the Chancellor is due to set out how the government intends to balance the books with new fiscal rules and an OBR forecast.
Ahead of this, we've been speaking to officials and ministers across government – including the new Prime Minister and Chancellor - highlighting the serious problems businesses are facing and how firms believe market confidence and a stable and growing economy can be achieved.
We’ve discussed the importance of targeted government spending and making sure government debt is balanced with GDP; alongside the continued need for struggling firms to have support with their immediate energy costs.
We’ve highlighted the actions government can take now which don’t require additional costs. For example, making regulation better, planning easier, and delivering better transport networks and digital connectivity across our nations and regions. Moreover, we’ve also been having important conversations on how the government can help firms to fill labour vacancies, including through proportionate immigration, adequate childcare provision, and supporting more employees to undertake training through a more flexible skills system.
In short, there is a lot riding on a medium-term fiscal plan to restore confidence.
You can read more detail on some of our asks of government in MyCBI, and also the latest thoughts from our Director-General in The Telegraph