Investment levels stagnating in Greater Birmingham
Birmingham’s business leaders have renewed their concerns at how lack of clarity over Brexit is increasingly impacting the UK economy.
Predictions by the Bank of England over reduced investment have set the alarm bells ringing for many.
Greater Birmingham Chambers of Commerce chief executive Paul Faulkner said he was particularly concerned about the predicted spending level, which are poised to drop by 20% by 2020.
The predictions emerged during the Bank’s latest interest rate deliberations, which saw the Monetary Policy Committee reaffirm the rate at its record low of 0.25%.
At the same time, the bank has again downgraded its forecast growth for 2017, this time to 1.7%, which is lower than its prediction in May of 1.9%.
Bank governor Mark Carney is also predicting that inflation in the third quarter is expected to average 2.7%, up from the 2.6% predicted in May. The 2018 earnings growth forecast was cut to 3% from 3.5%, and 2019’s to 3.25% from 3.75%.
Mr Faulkner said: “It was no surprise to see the MPC vote to keep interest rates at a record low level.
“However, it was concerning to see the Bank of England downgrade growth predictions for the next 18 months as inflationary pressure continues to squeeze wage growth, no doubt impacted by the fallout from Brexit negotiations.
“The most eye-catching headline saw Mark Carney predict that investment spending levels in the UK will be 20% lower in 2020 compared to pre-referendum levels.”
The chamber’s latest Quarterly Business Report has revealed that investment levels across the Greater Birmingham area remain stagnant.
“Now more than ever, the Government needs to articulate a clear vision around a Brexit policy programme which puts the business community at the heart of its agenda and removes this cloud of ambiguity,” added Mr Faulkner.
