Britain could be pushed into a “new economic storm”, the director general of the British Chambers of Commerce has warned, as he urged politicians to take action to support the UK over the coming year.
John Longworth said that “neither ministers nor businesses can afford to be complacent” in addressing priorities for British business. “The government has to stop wasting opportunities to radically reshape the UK economy,” he said, Yahoo reported.
Longworth added that the government had “wasted some big chances to deliver real change” this year, by failing to decide on a new runway for the South East, and implementing a Spending Review “that placed political priorities ahead of economic necessities”.
Ahead of an expected increase in the Bank of England interest rates from their historically low levels of 0.5%, Longworth said that higher borrowing costs could leave businesses and consumers “exposed”.
“The UK has been too reliant on consumer spending and asset transactions, driven by increased borrowing, for far too long, and this leaves the economy at risk.
“We may have solid levels of economic growth, but there are many clouds on the horizon that could ultimately push Britain into a new economic storm.”
The Institute of Directors’ chief economist has cautioned that corporate profits could reach their peak next year, as low inflation and rising rates leave businesses exposed.
The BCC’s calls followed warnings from the Confederation of British Industry that the “cumulative” burden on businesses, including the apprenticeship levy and the new national live wage, risk costing jobs and hitting economic growth.
Struggle
Carolyn Fairbairn, the CBI’s director general, said that the government had put “a number of extra strains on businesses that are adding up”. She accused politicians of putting “the short-termism of modern politics” ahead of a “prosperous future” for the UK.
“Overall, UK policymakers need to deliver regulatory stability and predictability. Businesses struggle to invest when the rules repeatedly change–as we have seen in the energy sector where policy shifts have chilled investment,” Fairbairn said highlighting the recent withdrawal of subsidies for green energy schemes, BBC reported.
While she acknowledged public concerns about immigration and pressures on some public services, Fairbarn called on the government to “reform the UK’s wrong-headed visa policies that are keeping global talent from our growing firms and global student from our world class universities”.
Fairbarn added that while the economy had recovered strongly from the financial crisis it could be “all too easily undermined by the short-termism of modern politics. We need to avoid this pattern in 2016, and keep a sharp eye on the long-term”.
The CBI director-general also called the delay in the government’s decision over airport expansion in southern England an “abject failure of leadership”.
She said the government must “take the big decisions on infrastructure, especially in aviation and energy, and get building roads, rail and more homes”.
“Good business needs good infrastructure–yet the UK currently ranks 24th in the world, according to the World Economic Forum. We have fallen badly behind over many decades–we must catch up and then pull away,” she added.
