What is the real story with the UK economy?

Will there be a happy ending post-Brexit?

The narrative of the UK economy seems to be one of growth, however, a slowdown, caused by Brexit, is continuing to cast a shadow. On the plus side, there have been some encouraging reports:

  • GDP rose by 0.3% in May from a month earlier, says Office for National Statistics. This is due to car manufacturing restarting after their self-imposed shutdown in March and April.
  • Professionals’ pay is growing at the fastest rate for more than a decade as the British labour market continues to defy the slowdown in the economy. Public sector workers have been awarded a pay rise that is above the UK’s 2% inflation rate. Private sector professionals are also enjoying wage growth – 3.4% on average. This is the strongest since 2008.
  • With the UK’s new PM now in place Boris Johnson, we’ll await their finance strategy for the UK over the short-, medium- and long-term.

However, the more a ‘no-deal’ Brexit is mentioned, nervousness creeps into the market and in the last few days, drama-laden headlines mentioning recession throughout the remainder of 2019 and throughout 2020 have become ever more noticeable. Is this unnecessary alarm? Time will tell. When the new PM releases his strategy for our economic prosperity, we’ll get more of an insight and a feeling for what the UK’s immediate economic outlook will look like.

One area of the UK economy that the PM needs to grasp is our retail environment. It would be fair to say that the High Street has been healthier and in seven months of 2019, the following retailers have failed or experienced financial constraints:

  • Stefanel
  • The Money Shop
  • Bathstore
  • The Yorkshire Linen Company
  • Realbuzz
  • Rococo Chocolates
  • Debenhams
  • Select
  • Pretty Green
  • The Bottle Shop
  • Office Outlet
  • Better Bathrooms
  • L K Bennett
  • Bennetts Department Store
  • JustInCases
  • OddBins
  • Patisserie Valerie
  • Miss Shoes
  • Chapelle Jewellery & Watches
  • Wild and Gorgeous
  • Hardy Amies
  • Steamer Trading

Source: Centre for Retail Research

What is certain is that more retailers will, unfortunately, experience tough trading in 2019. We’re not going to speculate on tittle-tattle; let’s give them our best wishes for the future.

Both Jeremy Hunt and Boris Johnson mentioned in their hustings presentations that business rates will be reviewed to make the high street more competitive. Our shopping habits have changed; that much we all know. The impact of apps, Amazon, click and collect shopping and so on has changed how we retail. How do we make the High Street more relevant? There’s definitely a place for technology to make the high street and shopping centre more of an experience. Or is the High Street just a casualty due to changing times?

At MRK Associates, we have experienced a busy trading year; we’re helping more and more businesses with their recruitment of revenue management, finance and office support personnel. Generally, we’re seeing an optimistic picture; clients have plans in place to withstand the direction on Brexit. These plans will, I’m sure, need refining – the forthcoming days of the 16th PM of Queen Elizabeth II will be incredibly revealing.

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