It has been a week of financial numbers for members to digest with inflation and UK economy growth both rising.
The 0.6% expansion in the UK economy during Q2 2024 signals a positive trajectory, reaffirming its recovery from the previous recession. This was widely expected and the markets have reacted positively.
Earlier this week we saw a 0.2% rise in the inflation rate to 2.2%. This development, while seemingly modest, carries significant consequences for members in both the medium and long term.
In the medium term, small businesses are likely to continue to face increased costs for goods and services. This inflationary pressure can erode profit margins, making it more challenging for businesses to maintain their current levels of operation. For many, this may necessitate difficult decisions regarding pricing strategies, cost-cutting measures, and potential adjustments to staffing levels. Dorchester Chamber is committed to supporting our members through these challenging times by providing resources and guidance on effective financial management and strategic planning.
Looking further ahead, the long-term forecast by city insiders is that there could be a further two interest rate cuts before the end of 2024. The markets didn’t react to the rise in inflation as it was expected and build in to their financial models.
President Steve Bulley said; “Dorchester Chamber remains optimistic about the resilience and adaptability of our members. Seeing growth return to the UK economy gives confidence that the markets are stabilizing which should lead to future interest rate cuts allowing debt repayments to fall and encouraging investment.”
“The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year,” said Liz McKeown, director of economic statistics at the Office for National Statistics, which released the figures.
Read the full report: https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpfirstquarterlyestimateuk/latest
Need to talk to an accountant, see our trusted members: https://www.dorchesterchamber.co.uk/business-directory/wpbdp_category/accountants/
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