Recession over?
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
The UK economy grew by 0.2 per cent in January, meaning the country could be out of recession quickly.
The economy returned to growth in January after it contracted in the final two quarters of 2023, according to the latest monthly data from the Office for National Statistics.
A recession is officially classed as two consecutive quarters of economic decline. The economy shrunk by 0.3 per cent in the final three months of 2023 and 0.1 per cent in the previous quarter.
However, the data from the ONS today backs-up the view of economists who have forecast that the UK will only face a small recession. Andrew Bailey, the governor of the Bank of England, said last month that the UK is likely to face only a “very small recession” and that the economy was “showing distinct signs of an upturn”.
The growth in January is not enough to end the recession - a recession is technically classed as being over only when an economy has grown again in a three-month period.
Nonetheless, the recovery in the economy is obviously welcome news for businesses. It also provides a fascinating backdrop to the forthcoming local elections and, of course, the general election. In his latest column for Business Leader, our political expert Steven Swinford has looked ahead to the local elections, reviewed the Budget and summarised what this could all mean for businesses. He writes:
Sunak is planning to frame his election campaign around national insurance – specifically a pledge to abolish the tax outright, although he has not put a date on the commitment. It is unfair, he argues, that people are being taxed twice on their income – once through national insurance, and again through income tax.
As he notes in the column, the economy is going to be vital for the election campaign, with the Conservatives and Labour looking to promote different messages about the fragile outlook. He adds:
On tax and spend, the Tories and Labour are almost entirely aligned, even if that means that whoever wins the general election will have to oversee significant cuts in public spending. The next election is ultimately likely to come down to competing visions – the Tories asking voters not to risk the fragile economic recovery, Labour arguing that it is time for change after 14 years of Tory misrule and incompetence.
You can read the full column here
Podcast…
The latest episode of our Business Leader podcast looks at learning from failure. We speak to John Stapleton about how he co-founded two successful food businesses - New Covent Garden Soup Company and Little Dish - but also suffered a failure in the US and with his promising athletics career before he went into business.
You can listen to the episode on Substack here, Apple here or Spotify here
Other stories that matter…
1. Metro Bank is cutting 1,000 jobs and will no longer open its high-street branches seven-days-a-week. More here
2. “We need to change the role of the chief executive and the major people so they’re not moaning and groaning and whinging.” That is according to Sir Nigel Wilson, the former chief executive of Legal & General. “That’s what’s happened and therefore the narrative is doom and gloom,” he added at an event yesterday. More from CityAM here
3. Keir Starmer says a Labour government will ban zero-hours contracts, but workers with these arrangements say they enjoy a better work-life balance than those on fixed-hours. “Labour needs to tread carefully,” writes David Smith in his latest economics column from The Times. “In the end [Tony] Blair did not ban zero-hours contracts because he chose to govern by pragmatism, not slogan, and presided over a rise of three million in the number of people in work. At a time when the labour market is showing signs of turning and plenty of other things need fixing, Starmer will need to follow the same principle, even if it risks disappointing the unions.” You can read the full column here
4. The BBC has done an interesting piece on businesses bringing manufacturing back to the UK from overseas. “We recently had a £800,000 boost in orders, with probably in the region of about £250,000 to £350,000 of that from reshoring," says Chris Ball of Advanced Chemical Etching, which is one of the businesses benefiting from this trend. More here
5. Using new technologies at work like robots, trackers and AI is hurting people’s quality of life, according to a new study of thousands of workers by the Institute for the Future of Work. You can read more in a story by The Guardian here. The full report is here
And finally…
Business Leader has a new regular feature called Secret Sauce which looks at the real reasons why a business is prospering. For Liverpool Football Club, this would be Michael Edwards and its sophisticated data analytics. Edwards left Liverpool last year but has just agreed to rejoin in a new role with Fenway Sports Group, the owners of the football club. The Athletic has published a fantastic feature on Edwards and his work at Liverpool, which you can read here. I am also looking forward to a new book by Ian Graham, who worked with Edwards at Liverpool, which is out this summer….
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The UK has been bumping along the bottom since 2008. we have had moments of expansion but the numbers have been distorted its a total lie to know what is going on. House prices through the roof and hardly anybody can afford them yet they do not even appear in inflation numbers when they are more than 50% of Houshold income. Its all a con job and we know it. UK does not make anything, all it does is propaganda and it does that like a 15yr old school girl.