Facebook Twitter LinkedIn YouTube
East Midlands Chamber News

Latest GDP stats highlight need for urgent Brexit deal, says East Midlands Chamber

Responding to the latest Office for National Statistics GDP stats that showed the economy grew by just 0.4% in October, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) chief executive Scott Knowles said: “While October represented the sixth monthly increase following the economic nosedive during lockdown, the sharp slowdown in output reflects the squeeze on activity from the re-introduction of tighter coronavirus restrictions, including the tier system in England.

“Firms in hospitality, which are most acutely exposed to the renewed restrictions, suffered particularly badly in the month.

“October’s slowdown is likely to be followed by a significant contraction in economic activity in November as the effects of the second national lockdown are felt, despite the prospect of a temporary boost from Brexit stockpiling.

East Midlands economy stalls after summer recovery

“The Chamber’s Quarterly Economic Survey for Q4 2020, conducted during the November lockdown, unsurprisingly shows the East Midlands economy stalled following a recovery from the summer lows.

“Advanced orders were particularly affected, with a net 16% drop compared to Q3 for bookings in the UK and a net 12% drop in overseas markets. Cashflow, meanwhile, has continued to drop throughout the year, falling by a net 15% in Q4, affecting the ability for businesses to grow.

“The picture doesn’t look much brighter for December either, with the entire East Midlands currently placed under Tier 3 restrictions, although business confidence remains stable and perhaps not as negative as expected.

Brexit deal is critical for businesses

“Going forward, while a vaccine offers real hope, failure to avoid a disorderly end to the UK-EU transition period or further lockdown restrictions before a mass vaccine rollout is achieved would severely drag on any economic recovery. Mass testing remains crucial to keeping the economy moving until the Covid-19 vaccine is fully rolled out.

“Achieving a UK-EU trade deal is critically important to avoid a damaging cliff edge for the UK economy. With time running out, Government must work urgently to close the major gaps in the guidance available to help businesses to prepare for the end of the transition period.”