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Businesses turn out in force for Bank of England’s annual economic update

Around 70 business people gathered to hear predictions for the British economy at this year’s Bank of England Update, held on 14 September at the Holiday Inn in Taunton.

Organised by Somerset Chamber of Commerce, the annual breakfast event provides businesses with an update on the current economic situation, as well as summarising the Bank’s views on the short-to-medium term prospects for the economy. 

The Bank of England’s Agent for the South West, Donna Kehoe, provided delegates with an overview of the UK economy through the lens of the Bank of England’s inflation forecast for the next two to three years. She covered all manner of topics, including content surrounding the international markets, the weakness of the pound and consumer confidence.

Ms Kehoe said, “The Monetary Policy Committee judges that currently there is very little slack in the economy, with firms at around full capacity and a tight labour market – unemployment is at 2.6% in the South West, which is the lowest rate in the UK!”

Looking ahead, Ms Kehoe said that the Committee’s forecast for UK GDP growth over the next few years is to be around 1.75%, slightly above the rate at which the supply-side of the economy is projected to grow.

She added, “That will put upward pressure on prices, requiring a modest tightening in monetary policy over the forecast period to ensure that inflation returns to the 2% target. Further tightening in policy will be gradual and limited, with Bank Rate expected ultimately to rise to a level much lower than what would have been considered normal prior to the financial crisis.”

From a regional perspective, she said that house prices in the South West are placed “toward the middle of the pack”. While the region has the lowest unemployment levels of anywhere in the UK, it can likewise boast the highest employment levels, reaching close to 80%.

Throughout Ms Kehoe’s talk, she addressed insights into what people in the region are expressing about economic conditions and, to close the event, she heard the audience’s views and observations on the economy. Questions taken during the Q&A session at the end of the breakfast meeting covered topics ranging from the implications of consumer debt through to productivity.

Stephen Henagulph, the new Chief Executive of Somerset Chamber of Commerce, concluded the event, saying, “We are very lucky to have the Bank of England’s Agent for the South West here to talk to local businesses and provide valuable insight that will aid their planning. It is a great advantage for our members and other businesses to have the opportunity to relay their views on the current economic position, as well as receiving key business information and predictions from the Bank.”

Helen Lacey, Managing Director of Red Berry Recruitment, was one of the delegates at the event. She commented, “The Bank of England Breakfast was extremely interesting and informative. It certainly encapsulated the uncertainty that we as business owners are feeling at present. There have been huge reductions in candidate availability over the past three years and sadly it seems that things are set to get even more challenging! Businesses large and small need to look at their retention strategy as much as their attraction strategy, being as flexible as they can with their staff as well as becoming as productive as possible.”

Simon Bodman from Jelf Insurance, which sponsored the event, said, “It’s been terrific to sponsor the Bank of England breakfast, which is always a fascinating event, and to meet so many businesses in attendance. Jelf Insurance has been a long-term supporter of Somerset Chamber of Commerce and of businesses across Somerset, and it was great to be able to tell the room about our services.”

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