I RECENTLY attended the first public UK speech of Bank of England Governor Mark Carney. The theme of the speech, which was addressed to business leaders and owners of small and medium-sized businesses, was stability in the market and boosting the UK economy.
Mr Carney said he was hearing from businesses that ‘a renewed recovery is taking hold amid a rising tide of optimism’ and that there were signs ‘that this recovery is broad based and set to continue’. This is something we too have been hearing from businesses in Northamptonshire, particularly through our Quarterly Economic Survey (QES).
The Bank of England’s priority now is to secure the fledgling recovery and allow it to develop into a period of sustained and robust growth. As part of this task, the Bank of England has pledged to fix interest rates until jobs, incomes and spending are recovering at a sustainable pace. Mr Carney also said he would have to see the rate of unemployment, currently 7.8 per cent, fall to at least seven per cent before even beginning to consider raising rates.
The Bank of England has also stated that it will work with banks in the UK so they can better ‘serve the needs of the real economy by providing credit to those who can put it to work’ and build confidence in the banking system.
The new governor is saying all the right things. Businesses need to grow in order for the economy to recover and to remove uncertainties, such as increases in interest rates, will help. If Mr Carney’s promise to get the banks lending credit to eligible firms and generally building confidence in the UK banking system comes to fruition, this will also benefit businesses and help them to realise their growth potential.
Business confidence is a significant factor in re-building our economy and, if economists such as Mr Carney are publicly stating that the signs of recovery and confidence are evident and set to continue, this will give companies the confidence and reassurance to invest in their staff and businesses, which in turn will grow the economy.
At Northamptonshire Chamber, we regularly ask companies in Northamptonshire through our QES how they are faring and what issues are affecting their business. And for several successive quarters now, the results have been positive and show an increase in the number of local firms exporting, recruiting new staff and looking forward to the next quarter with confidence.
The survey results not only provide us with a true picture of the local economy, but are also fed through to the British Chambers of Commerce and then to national Government and the Monetary Policy Committee (MPC), along with the results taken from 50+ other UK chambers. This provides an accurate national economic overview that can influence the MPC on future interest rate decisions and informs the chancellor ahead of his Autumn Statement and Budget announcements.
The latest QES is now live until Monday September 16 and I would encourage members of the Northants business community to complete it to enable us to get the most accurate picture of the county’s economy. Complete the survey here: www.britishchambers.org.uk/qes
PHOTO: Paul Griffiths, CEO, Northamptonshire Chamber of Commerce.