#HereForBusiness: News Roundup – 22/06/2023

Inflation stayed high, interest rates increased, and company insolvencies jumped.

Here are this week’s main business and economic stories:

• UK inflation remained at 8.7 percent in the 12 months to May, according to the Office for National Statistics’ (ONS) Consumer Price Index (CPI). The ONS report revealed rising prices for air travel, recreational and cultural goods and services, and second-hand cars were principal contributors to the stubbornly high annual rate. A decline in the cost of motor fuel, on the other hand, represented the most significant downward trend. The headline figure came as a surprise to many analysts, with economists polled by Reuters predicting it would fall to 8.4 percent. It also means that Britain has the highest inflation of any major advanced economy. For comparison, eurozone inflation stands at 6.1 percent, while US inflation dropped from 4.9 percent to 4 percent in April.
• In a related move, the Bank of England’s (BoE) monetary policy committee (MPC) voted by a majority of 7-2 to raise interest rates to 5 percent on Thursday – up from 4.5 percent and the highest level since 2008. Following a 25 basis points hike in May, today’s 0.5 percent increase is aimed at curtailing soaring inflation, which unexpectedly remained at 8.7 percent last month – well above the Bank’s 2 percent target and an outlier among major Western economies.
• Government data showed Company insolvencies in England and Wales jumped by 40 percent in the year to May. 2,552 companies were declared insolvent last month, compared to 1,825 during the same period in 2022. 2,181 of these insolvencies were registered as creditors’ voluntary liquidations (CVLs), 189 as compulsory liquidations, 151 as administrations, and 31 as company voluntary arrangements (CVAs). The government said the increase in compulsory liquidations was in part due to “an increase in winding-up petitions presented by HMRC”.
• Finally, tram workers in Greater Manchester accepted a pay offer, ending a long-running dispute and averting further strikes. Metrolink staff had planned to stage industrial action on 10th and 11th June after rejecting the offer of a 5 percent pay rise over a period of 15 months. However, an improved deal was tabled after representatives from the Unite trade union met with the region’s mayor, Andy Burnham, earlier in the month. More than 95 percent of Unite members balloted voted in favour of the new deal, which included a 6.5 percent pay rise and a one-off payment of £1,000.

If you run a small or medium-sized business in Greater Manchester and want to understand how the present and future economic climate might impact your operations and revenue, GC Business Growth Hub’s #HereForBusiness package provides practical guidance and expert advice on a range of topics to help you manage the increasing cost of doing business.

To this end, next week, we are running a series of drop-in sessions across the region:

Find out more by browsing our resources, from events, blog posts, and factsheets to news updates and webinars.  

If you have any questions, get in touch now.

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#HereForBusiness is funded by the UK government through the UK Shared Prosperity Fund.