Things governments should do to stimulate the economy
UK’s economic recovery seems fragile. It was clear after seeing the events in previous weeks.
The British Chambers of Commerce survey showed that around 82% of manufacturers encountered problems hiring the right staff three years ago. In 2018, this was the highest level after they started to survey in 1988.
Unquestionably, such an outcome is a result of the exit of the UK from the EU. Besides that, the Covid pandemic played its part in increasing such challenges. Experts say that one event seemed expected while the other one was totally unanticipated. However, these challenges and changes need a consistent and coordinated plan to change the current situation.
The BCC offered a plan for economic recovery as businesses are in bad economic conditions mainly produced by the current pandemic. Besides that, there is another critical situation to be considered which is labor shortages. The rest of the issues include the increased prices of energy and materials, with difficulties of shipping. Now, it takes more time to transfer goods beyond borders while businesses face increased taxes. Experts assume that these issues create a massive problem as an unpredictable winter is around the corner.
Companies and all kinds of businesses want certainty. The most recent BCC forecast says that there will be an inevitable fall of 2.6% in investment this year. This prediction suggests that the economic recovery will be on unstable grounds. They also predict around a 5 percent rise in inflation. This will double the target of the Bank of England. All of these events create unease among businesses as nobody knows what will happen next. The government needs to work with companies and all types of businesses to take direct action while identifying what can work well in the longer-term solutions. Fulfilling this plan should start with solving the labor shortages which affect almost every sector of the economy.