How strong is the UK economy?
Last month, a survey from the Confederation of British Industry (CBI) confirmed that the level of business optimism reached its highest point for 22 years in the UK, as reflected in the falling level of unemployment to a staggering rate of only 7.1%.
What a difference a month makes …
This week, Mark Carney of the Bank of England has rocked the mood. He suggested that the interest rates are expected to rise sooner than previously implied, which means that the housing bubble, so feverishly pumped up by London, may burst and the consequences will be very difficult to manage.
Both international observers and UK think tanks have already warned that the rising property price tag and persistent weakness in UK productivity may threaten the economic recovery.
According to The Resolution Foundation, one million households may face extreme levels of debt should the rate increase to 3% and the worst case scenario would involve those with interest-only mortgages.
The above scenario, coupled with the wage growth not keeping up with inflation (0.9%) will definitely see insolvency numbers growing rapidly again.
Economists are being cautious and the medium and long-term outlook is rather mixed, as the main challenges of 2014 will concern the difficulty of reviving key sectors of the economy, soaring exports and companies having difficulty in funding growth.
In these turbulent times impartial professional business advice, taken early, is absolutely paramount.
RNF offers free initial consultation; please contact us on: 020 7253 7171 (London), 01622 764 612 (Maidstone) or email: email@example.com to arrange.
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