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The economy and you November 2022

ended 10. November 2022

On Friday morning at 07:00, we're getting the latest official snapshot of the UK economy — for the third quarter of 2022 (July to Sept). It's expected to show the economy contracted, potentially quiet sharply. This story will dominate the news agenda on Friday so please answer any or all of the Qs below to get your views heard in the local and national media.

  • As a small business or charity, how does the economy feel for you right now?
  • How was business during the third quarter (July-Sept)?
  • Are you seeing reduced demand for your products or services / reduced donations?
  • What are the main challenges you're facing right now as a small business or charity?
  • What would you like to see announced in next week's Autumn Statement to help your business or charity in these challenging times?
  • Do you expect the economic outlook to get better or worse over the winter?
  • What measures are you taking as a business or charity to ride out what the Bank of England predicts could be the longest recession in living memory?

Any other thoughts, jot them down. We'll do our level best to get your views into the local, national and trade media.

17 responses from the Newspage community

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Kate Reed
Owner at Angela Reed
The economy feels extremely unstable right now. We have found that the market has become incredibly reactionary, which we saw in Covid and now see with the war in Ukraine and the economic crisis. Each time there is panic in the media, our sales are directly affected. Our sales were hit drastically in the last quarter, although we are now seeing a small uptick as we head into Christmas. We invested heavily in our online presence last year and we are continuing to hold our nerve in this area, although we have had to make cuts in other areas to ensure this area of our business can still thrive. We are making ourselves leaner in response to the recession. We have made cutbacks, but we have also maintained investment in our online presence, which is becoming ever more important in modern retail.
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Leonor Calaça
Owner at Eleanor Shadow
As a one-woman, micro-business owner, I am concerned that the way people feel about the economy - more than the economy itself - will make people shy away from non-essential purchases. This means those of us who sell aspirational items might get hit with lower sales if we can't convince buyers to indulge. My third quarter was relatively quiet, but business is starting to pick up, which makes me think customers are shopping for Christmas a little earlier to avoid spending all of their money in one go. My main challenges at present are trying to keep prices attractive whilst still having enough profit to pay my bills. Customers expect discounts and deals and it's been increasingly difficult to provide those due to the higher cost of materials. I would like to see next week's Autumn Statement announce specific measures to protect small businesses from going under. I'd like to see energy prices being capped for small business premises, and tax incentives if people doesn't reach their usual profit levels. I moved from Portugal to the UK when the former was going through a recession over ten years ago; as such, I know what it can feel like and am getting ready to cut as many non-essential costs as I can in my business and personal life. However, I don't believe reducing spending in business is necessarily the way to go, as investing in some well-planned growth is good preparation for the future. I am also keen to support fellow local small businesses, and believe that if we all try to help each other, we can ride this recession out and come out bruised, but better equipped to withstand other challenges in the future.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
The perfect storm of high inflation, rising interest rates and incompetent government has let to a recession that will hurt more than previous ones. Normally the Bank of England would raise interest rates to cool an overheating economy where the country had filled good quality well paid jobs and the extra money in their pockets was fuelling demand for products. Well, it's certainly not like that now. The economy is retracting quicker than a Tory promise of tax cuts, although we have a tight labour market most of these jobs are low paid and insecure and the Bank of England is being forced to increase rates because of imported inflation due to energy and food prices. What a mess. People's budgets are being squeezed by inflation on food, clothing, energy and rent as well as increases to mortgage costs with rapidly increasing rates. Add to this across the board tax rises and real term cuts to benefits and services and you are staring at possibly the worst recession since the Great Depression nearly a century ago. Considering we know that inflation will fall back to normal levels once the shock energy prices rises fall out of the cycle in March, and a recession means demand will be near non-existent possibly causing deflation, I would call on the Bank of England to cancel any planned interest rate increases altogether. I would also ask the Chancellor to consider a major cut in fuel duty. This is something that could help every household and also put downwards pressure on inflation as businesses would be able to reduce prices due to lower cost logistics. Businesses have been shouting from the rooftops about the need to reform business rates, but I expect this will fall on deaf ears as it's a cash cow for the Treasury despite its clear and obvious unfairness. Successive governments have been naive in not implementing reforms to business rates thinking short term, rather than realising rates stifle smaller business and prevent investment and growth. I don't hold out much hope for any help for small businesses in the budget. In fact I think they will be asked to pay a disproportionate price to get the books balanced, as will normal working people. The government says and does two different things and proof will be in the voting come summer 2023.
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Riz Malik
Independent Financial Adviser at R3 Wealth
The economic climate at present is akin to that at the start of the Covid lockdown. One major difference is that the Bank of England base rate was 30 times lower than it is at present. Businesses that rely on discretionary spending will be hit first and the hardest. Those expecting any early Christmas presents from the Autumn Statement will be severely disappointed. There is more chance of Donald Trump and Joe Biden singing Kumbaya around a campfire while Hilary Clinton toasts the marshmallows. As the economy worsens, if you are not using fiscal policy to stimulate demand in an economy you have to use monetary policy. That is one reason I believe a prolonged high-interest rate environment may not be the new norm. The cynic inside me suggests we may see rate reductions the closer we get to a general election. Although the government does not set interest rates its actions can lead to changes as we saw during the reign of the terrible two. This can boost output and bring back the feel good factor. At present, the UK economy has lost that lovin' feelin' now it's gone, gone, gone.
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Kate Underwood
Managing Director / HR Director at Kate Underwood HR and Training
At the moment there is definitely a feel of both people and businesses tightening their belts. We are still getting in a lot of enquiries but they are not converting as quickly as they have been. There is still demand but small businesses are still looking after their teams but they are doing it a bit slower. Being creative and finding products that are online is something we are developing more. Keeping the momentum up over the festive period will be key, as we look after some charities and they have seen a reduction in donations but are hopeful for more over the festive period. Employees are struggling for money and retention is dropping, which is catastrophic for smaller businesses because they lose not just am employee but a lot of knowledge, too. We are supporting our clients with lots of advice and support with regards to how to slimline their businesses and organise it and look at other costs before looking at staff. We have also been providing support to clients on how they can support their teams. Recruitment is definitely an employees' market at the moment and gazumping is happening a lot, so ensuring that there is a robust recruitment process and being transparent from the get-go is so important. Until they turn up on the day there is no guarantee that they will, which for small businesses is a huge blow. In short, staff retention has never been more important in the current economic climate.
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Elliott Benson
Owner at Sett Mortgages
As a small business owner, the current state of the economy does make me uneasy although business has remained steady and actually spiked somewhat in the third quarter. I am currently not seeing a reduction in demand but I am seeing a shift in the kind of enquiries I am receiving from predominantly purchase to now many more re-mortgages. The main challenge currently is constantly adapting the business to ensure I am staying relevant in terms of the service I can offer to the changing needs of the current marketplace. I am remaining optimistic about the future and hopeful that the Autumn Statement will bring back some measure of confidence in the econmy moving forward.
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Debbie Porter
Managing Director at Destination Digital Marketing
As a small business owner, the economy feels like it’s in tatters and we have a long winter still ahead of us. We don’t need an official snapshot to know a sharp contraction of the economy has taken place. We serve businesses who sell to end consumers and so our business is always watching from the relative comfort of the slipstream to see what is directly ahead of us. It’s small comfort to feel we have a couple of months' advanced warning, especially when we can see consumer sales figures laid out in front of us, giving us our own snapshot of consumer spending habits. Spiralling costs is the main challenge we are facing in our own business right now, coupled with every business’s least favourite exercise of reviewing charging structures. Safeguarding the jobs of my staff is a primary concern so I need the money to keep on flowing. Although the Bank of England made its base rate changes to curb consumer spend in order to force the lowering of prices to reset the market, this macroeconomics war game positions small businesses like us as mere collateral damage. Enduring this for the next two years is going to be a very grim time for all.
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Paul Holland
Mortgage Broker at Henchurch Lane Financial Services
The economic outlook for us, as I imagine it is for most small businesses, is daunting. We're very lucky as a brokerage to have experienced two of the busiest years in mortgage history when other businesses would have struggled as a result of multiple lockdowns and social distancing measures enforced throughout the pandemic. We have a strong client bank and pipeline that should go some way to weathering the upcoming storm. July to September was pretty much business as usual for us. Rates weren't quite at the levels to prevent people from making decisions until later in September. We have seen purchase applications go off a cliff edge since the mini-Budget was announced. The challenges we face going forward into 2023 are dealing with lots of difficult discussions when people come to the end of their very competitive fixed rates, along with reduced levels of new enquiries. We'll be looking to pivot and diversify to cover ourselves as a business. Next week's autumn statement is the most important budget announcement since I've been in the industry. I would urge the Government to reflect on the sheer amount of damage the choices made in the mini-Budget had on the economy and I'm confident they'll learn from those errors and implement the kind of fiscal changes needed to restore confidence in the market. I think people are expecting tax increases and cut backs and know this is essential to fix the broken economy in the long term. As a business, we realise our responsibility to our clients and know now more than ever that a thorough, high standard of service will be essential to everyone looking at anything financial.
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Lucie Mann
Regenerative culture lead at New Forest Aquaponics CIC
It all feels really scary right now in the economy. We are about the launch our first fundraiser and it feels like the timing is going to make it even harder to raise the funds we need. Last Sunday saw our 3rd clothes swap, waterside clothes swaps, and we had even more people through the door than ever before. But donations on the door did not increase, as people have less money to donate. The waterside food project brought along bread and other supermarket surplus, and it all went this time. It really feels like the pinch in people's pockets is taking hold. The sales of our cleaning products that support the community side of our work have almost stopped as people hold onto their money. I am really worried as to how we will carry on helping our local community. I really feel this is going to get worse, as though we are heading back to the 1970's. Our work starts with helping people live in a way that helps tackle the issues surrounding climate change, and most of it is things that will cost people less in the long run. When people are consumed with worry about how they will pay for everything each month, it makes it so much harder to see how change will help. We have a very long couple of years ahead of us.
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Lucy Scott
Director at Lil's Parlour CIC
People ask me every week, "How are you?", my answer. Surviving. Lil's Parlour CIC is a revolutionary pay as you can bakery, which means that, with no catch, people come along and pay what they can afford for something lovely, something mood lifting and something that takes you out of this bleak Dickens novel the current government seem to enjoy feeding us chapter by chapter. I love what I do, the local community love what I do but it does rely on a micro economy of givers and receivers to work. Right now I am seeing a wild imbalance where the people who need my help are outweighing those who can afford to pay a little more to keep us afloat. I will keep going. I am putting on a free Santa's Grotto in December, we have 480 children booked in and they will not be let down. I am running The Chocolate Chronicles campaign where people can apply for FREE bars of chocolate to sell for me to bring in donations. People are applying, they want to help but by taking away the financial risk to them they feel empowered. I saw a poll recently where 50% of small business owners said they are concerned this will be their last Christmas trading. I am putting every ounce of energy I have into making sure I am not part of that statistic but if I am I will go down as the voice, not the echo, and the flag will say "Mankind was my business."
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Austyn Johnson
Founder at Mortgages For Actors
Personally, I feel that the economy is starting to stabilise and settle at a level that makes financial planning a bit simpler. Business during July to September was booming. We had so many enquiries that we were all working long days and taking calls in the evening and weekends too. This is a level that we are comfortable with and intend to take on more brokers should it stay there after this blip has stabilised fully. Buyers are more wary at the moment but as soon as the focus has turned elsewhere and confidence comes back, I feel that the housing industry will continue growing. The main challenges we find at the moment is overinflated house prices in some regions. In some areas of the country, properties are being downvalued at application, meaning that buyers need to find more deposit. For some, this is not viable. In the Autumn Statement, I'd like to see it announced that the market has stabilised. Most people rely on the media to build or instil confidence. Once confidence has grown again, the market will be back to 'normal', hopefully this will be over the next month or so, and winter will be positive. We work every day, to do or best for each of our clients. If that's mid-recession, then that's what it is. We will cotinue to be as proactive and client-focused as ever, which, in turn, promotes our business well.
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Julia Usher
Managing Director at Ashes Memorial Jewellery
As a small manufacturing and ecommerce jewellery business, the economic situation we find ourselves in at present is nothing short of terrifying. With rising interest rates and the news of the UK being in the longest ever recession, my business confidence has never been so low. We have found the third quarter the most challenging in our company's history. Sales have been diabolical, with a decrease in sales of 38% year on year. Consumer confidence is at an all time low and the outlook is bleak to put it mildly. The economic outlook for the winter months looks very bleak. The festive period is vitally important to us as over 70% of our annual turnover happens from now until Christmas. Retail armageddon is now on the cards for many small retailers and very troubled waters lie ahead for us. The government needs to step in and help retailers across the country by reducing VAT. This would really help consumers and business owners alike. Many small businesses are currently struggling with cash flow challenges. We need access to low interest loans that can be accessed quickly and paid back over a reasonable time period, similar to the business loan schemes offered during the pandemic. The economic outlook in my opinion is sadly set to get worse and many small businesses right now are fighting hard to survive. I am trying to implement changes to help. Actions include offering promotions across the website to try and encourage spend. I have also added two buy now and pay later options at the website checkout to try and help people who may need to spread the cost. I have also stared to be very mindful of the electricity consumption we use. If machinery is not in use we now turn them off. We have also focused on increasing our social media activity to try and reach more perspective customers.
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Jenny Blyth
Small business owner at Storm in a Teacup Gifts
Working in this current economic crisis feels like trying to find stability on a bouncy castle. You don’t know where the next blow is coming from or if we will ever find solid ground again. I have no hope that things will take a turn for the better whilst this current government stays in charge. This country needs a completely new start. I fear for my customers and how they will cope through the winter.
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Sara Hall
Founder at Lilibet & Phil Publishing House
Talking to my sellers, I can tell you right now the mood is grim. Sales are down in the gift industry, across the board, and each new update brings more and more bad news for small home-based artisan business owners. All of us are facing huge price increases in overheads, as well as overnight price hikes on basic materials. One seller reported a 45% increase in the cost of his canvas. Passing that cost on to his customers just isn't an option. I would like to see a freeze in next week's announcement. Just a pause to let everyone catch their breath. Energy prices are going up monthly, and the hits just keep coming. Small businesses are being battered and the outlook for winter is already bleak, with our customers cutting back on gifts for Christmas. The nation is tightening its purse strings and getting prepared for a tough winter ahead. In this climate, gifts are always the first to go. The Silk Purse Guild has extended its pre-launch offer, and intends to fund the website and services into 2024, to help as many creative businesses survive as we can, with all plans FREE until 2024, if you open a shop before 1st January 2023. Our focus now is on training, with marketing and product design at the forefront of our efforts. We are getting our sellers better prepared for a time when the current economic pressure eases off, although right now, that is looking like a rather long dark tunnel ahead.
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Andrew Deighton
Owner at AWD Development Solutions Ltd.
I thought I’d turned a corner. I’ve just had the best six month start to my financial year for a long time. Although coming after the disaster that was 2020/21 when my business disappeared overnight, and receiving absolutely no government support, it wasn't difficult. But I'm now worried about the next twelve to eighteen months. What's the first thing that businesses cut when they’re facing financial challenges? They slash their training budgets and stop developing their people. Whether I think that's sensible or the right thing to do, especially in the current employment climate, is irrelevant. It's what happens. I can’t control the decisions they take, but I can control how I respond to their decisions. That’s what’s important. I'm just going to have to do what all owners of small business who are working from their home offices this winter will have to do: keep calm, layer up and carry on.
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Dr Jackie Mulligan
Founder at ShopAppy
We have small retailers doing ads urging their customers not to overspend, we have businesses talking about a 500% increase in their energy bills and operating with no clarity on the support mechanisms currently in place, let alone after April. We have hospitality businesses crying out for VAT reductions to help them through yet another tough season. The small businesses on our high streets are paying the price for distraction in Government that has delayed much needed reform, reassurance and action. There is hope, though. Customers can help in this crisis by spending what they have, however little or much, in local businesses, the heart and soul of our communities. Direct your spend to small businesses not billionaires this Christmas.
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Racheal Straughan
Founder at Mayfli
We are seeing businesses really struggling right now, not only with reduced sales but also with stock shortages and slow stock delivery. Stock pricing has increased so much in some industries they have had to stop selling certain products. We have one business where their sales have gone up significantly, although their profits are down by 30%, as people are buying lower-priced items. People are buying more consciously and we are hearing everyone is going to have a smaller Christmas with regard to gifts. This will have a huge impact on small retail businesses as Christmas is the busiest time of year for many of them. I think we will see a lot of businesses closing down in the New Year. Small Businesses are facing reduced sales, and increased overheads with energy and supply costs increasing dramatically. At the same time, they are unable to increase their prices as they are competing against corporate giants such as Amazon. To be seen as a small business they need to trade on these platforms and they are taking away anywhere from 13% to 40% of their gross profits and in most cases these fees are charged on shipping, too. The government needs to support small businesses with tax breaks and reduced Vat. Large corporate businesses need to pay more taxes and take away their ability to hide from taxes such as corporation tax with offshore registration. This has to stop. Businesses have not had a chance to recuperate after Covid and some businesses are still struggling to pay back their Bounce Back loans on top of the challenging times. I can only see the economic outlook get worse over the winter, with many small businesses reducing staff numbers to save money, and reducing their hours in the workshops to save money on heating. I really worry for the UK small business community right now. Our communities really need to come together and support each other. Buyers need to be more conscious of where they are buying from, ensuring every penny they spend remains in the UK and does not get pulled out of the UK economy over to Wall Street and the USA in general by shopping on Amazon, eBay, Etsy and NOTHS. I see the huge contradiction between the government saying they want to save small businesses and our high streets and their actions, which are crippling small businesses and destroying our high streets and our communities.