According to the British Chambers of Commerce’s latest economic forecast, the UK’s economy is expected to grow at a slower pace and trade is set to lag significantly behind the wider recovery. The expectations for UK GDP growth have dropped from 7.1% to 6.8%.
GDP growth in Quarter 3 was recorded at 1.3%, however there were expectations for GDP growth in quarter 4 to slow down to 0.5% due to staff shortages, supply chain disruption and rising inflation. The increasing concern over the fast spread of the Omicron variant has also impacted GDP growth throughout this quarter.
Sara Williams, CEO of Staffordshire Chambers of Commerce, said: “BCC’s latest economic forecast has demonstrated the struggles that businesses have endured throughout this last quarter in 2021. Staff shortages and supply chain disruptions have already affected the way that firms have been able to operate but with the additional fears over the Omicron Variant public behaviour has completely changed and this has put firms under even greater pressure.
“The last weekend before Christmas is notoriously known for heavy footfall across all retail and hospitality sectors, yet this weekend large numbers of consumers opted to isolate at home ahead of the holiday. The number of people on high streets fell by 5.9% on Sunday and this is likely to have a huge impact on these firms, majority of which were counting on the week before Christmas to bring up their sales.”
It is clear that the spread of the new Covid-19 Variant has greatly hit customer confidence and despite an official lockdown not yet being announced, customers fear being kept away from loved ones this year and have decided to cancel many upcoming outings.
Firms in the hospitality sector have asked the government for an extension on the discounted VAT rate as well as for business rates which were due in the first quarter of 2022 to be deferred. Chambers across the network urge the government to listen to businesses in sectors that are most affected by the restrictions. It is essential that the right support is offered to businesses as this will help the UK get through a challenging winter without serious damage to our economic recovery.
If you require any business support or advice, get in touch with Staffordshire Chambers of commerce on 01782 202222 or email email@example.com.