Business leaders from across the North East are calling for help every day as costs soar and a recession looms.

That's the stark picture from the North East England Chamber of Commerce as the latest forecast from the British Chamber of Commerce says there will be a recession before the end of the year, adding 'Time is fast running out'.

Rhiannon Bearne, Director of Policy and Representation at the North East Chamber said: “The British Chamber of Commerce latest quarterly economic forecast will not surprise businesses in the North East. Our members talk to us daily about the impact of rising costs and slowing growth.

Read more: Your chance to ask Bank of England about the cost of living

“We’re urging the Government to act now on our new five point plan to tackle the business crisis. Introducing a temporary cut in VAT to 5% to reduce energy costs and Emergency Energy Grants for SMEs would make a real difference quickly. We’re also working with members across education, housing and the wider public and voluntary sector on practical, local action to help safeguard families and households most at risk.

The Northern Echo: Rhiannon Bearne of the North East ChamberRhiannon Bearne of the North East Chamber

“Taking these actions now will help maintain business and consumer confidence and protect the most vulnerable in our communities. We look forward to working with the new Prime Minister and leadership team next week on these joint plans of action.”

Nationally the BCC said it expects the UK economy to "plunge into recession before the end of 2022, with inflation spiking to 14% and lingering weakness in growth expected to continue into 2024".

It downgraded its expectations for UK GDP growth, said inflation is now expected to reach 14% in Q4 2022 and forecasting negative economic growth for Q2, Q3, and Q4.

Alex Veitch, Director of Policy at the British Chambers of Commerce, said: “Our latest quarterly economic forecast will not be of any comfort to either consumers or businesses.

"The extreme inflationary pressures already present are only likely to increase as we head towards Christmas; with the UK economy already thought to be in recession. Tackling these pressures must be at the top of the new Prime Minister’s inbox when they take up their position next week.

“We have revised our projected inflation rate upwards by four percentage-points to a new high of 14%. Inflation is running rampant, and it is not only impacting the cost of doing business, but also the ability of some firms to keep their doors open. In January, the BCC found that 23% of businesses surveyed were looking to scale down or even consider closure in response to rising costs.

“With prices spiralling out of control, they are expected to race ahead of earnings growth by a ratio of 3:1 in Q4 2022. This will undoubtedly impact consumer confidence, another key concern for businesses.

“Action is needed now. Time is fast running out, the Government must step up to the plate and do what is needed to protect businesses, livelihoods and jobs.”

 

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