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17th June 2024

BCC on labour market, GDP and trade

The British Chambers of Commerce has commented on the latest labour market, GDP and trade statistics.

Responding to the latest labour market data published by ONS, Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said:

“There are further signs that the labour market is cooling as vacancies continue to fall and unemployment ticks up.  However, this has yet to translate into any noticeable weakening of growth in real wages.

“This would suggest that competition for skills is still strong, and the substantial cost pressures of wages and interest rates will continue for longer. The rise in the number of economically inactive is also a cause for concern.

“The BCC’s election manifesto is clear that better skills planning is needed across the UK to boost productivity and growth.  We must improve the training of staff, unlock the talent of people who have stopped looking for work and find ways to support the long-term sick back into employment.

“Getting the strong economic growth we all want to see will only be possible when the skills and workplace challenges are resolved.”

On GDP, David Bharier, Head of Research at the British Chambers of Commerce, said:

“While there was no growth in April, it’s important to focus on the broader trend, rather than volatile monthly movements.

“Growth of 0.7% in the three months to April is positive news. Our own forecast, released last week, has upgraded growth expectations for 2024 to 0.8%, rising to 1% in 2025.

“However, while the broader trend is ticking up, downside risks remain. Many businesses we speak to are still held back by skills shortages, high borrowing costs, and trade barriers with the EU. Sectoral performance remains very imbalanced, with retail and hospitality sectors consistently reporting weaker growth.

“With unemployment rising and inflation slowing, pressure will be growing on the Bank of England to cut the interest rate. But to boost investment, any cut needs to be accompanied by clear action from the next government. As we set out in our election manifesto they must prioritise on unlocking growth across skills, business rates, trade, AI and green innovation.”

Regarding the latest trade figures, William Bain, Head of Trade Policy at the British Chambers of Commerce, said:

“Services continue to perform particularly well among UK exports, with solid increases in the past three months. Goods exports performed less well in April, as in recent months.

“The BCC’s election manifesto and our recent Global Britain report set out clear options for policymakers to improve UK trade performance.”

The UK Trade Picture In Detail

Goods 

Goods import volumes (excluding inflation) rose by 7.8% in April, with similar increases for both the EU and the rest of the world. Imports from the EU rose by 7.7% (£1.6bn). This was led by rises in machinery and transport equipment, and food. Non-EU imports volumes rose by 7.9% (£1.3bn) driven by higher miscellaneous manufactured goods and fuels.

Goods export volumes fell by 2.8%. For the EU, they fell by 1.4% (£0.2bn), after adjustment for inflation – the main decline being in crude oil sales to Germany. Non-EU goods exports volumes fell by 4% (£0.5bn), driven by chemicals exports. This was offset to some degree by higher fuel, machinery and transport equipment exports.

Services 

UK services trade showed another month of consistent growth in both import and exports. In the month of April, services exports increased by an estimated 0.6% (£0.2bn) on values measure. At the same time, imports increased by 0.9% (£0.2bn) on the values measure.

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