Leading North East business figures heard how the Bank of England’s forecast for 2018 compared with the findings of a key economic survey at the Marriott Hotel, Metrocentre, on Friday (5 January 2018).
The North East England Chamber of Commerce Quarterly Economic Survey (QES) main findings were outlined at the briefing. They included the region seeing the strongest growth since 2015 and business confidence up, with manufacturing investment at its highest since 2015.
Andrew Hebden, deputy agent for the Bank of England in the North East, guest speaker, said: “The Bank finds the QES carried out by the British Chambers of Commerce extremely valuable to understand how businesses are feeling. It very much supports and reinforces the work that our agents carry out as we meet with businesses every day.
“I was particularly interested in the results of the latest survey especially the fact that respondents highlighted inflation as a particular concern at present.
“These topics are central to intelligence we are gathering from companies along with a specific interest in the labour market and how firms are responding to reports of increased recruitment difficulties in terms of pay award expectations for 2018.”
Andrew outlined the Bank’s latest economic forecast which sees inflation gradually falling from its current level of 3.1% as the impact from sterling’s depreciation in 2016 begins to wane.
At the same time, the Bank expects unemployment to remain at a low level, with some evidence that pay settlements will begin to rise a little in response to the tighter labour market.
Andrew also explained that the Bank, which increased interest rates from 0.25% to 0.5% in November, expected any further increases in rates to be limited and gradual.
Echoing QES export findings the Bank is also positive about global growth for 2018 as business investment and consumer confidence remains strong in some of the UK’s key export markets.
Bill McLeod, Pricewaterhousecoopers said: “I find these updates really useful because they confirm what I see at PWC and our clients. I agree that 2017’s last quarter was strong and I’m optimistic about the early part of 2018, although it is harder to see beyond the middle of the year because of Brexit.”
Alison Smith, Lloyds Bank, said: “The QES verifies what we are seeing in the marketplace at the moment in particular with manufacturers and exporters. We are seeing a lot of our clients focusing on efficiencies and controls required to improve productivity which was highlighted here.”
The Chamber’s QES is the largest, independent analysis of regional business opinion and has been carried out since 1995.