IoD Weekly Policy Report 19 - 23 June 2023
As we bask in the summer sun, maybe getting a little sweaty on the journey into the office, it would appear that the climate around us is not the only thing experiencing an upward trend. This week in policy has brought our attention to a series of things on the up that demand our attention. So, grab an ice-cold drink, find a shady spot, and let’s dive into the rising tide of this week’s policy developments…
Up and stuck – Inflation is proving stubborn once more, and just won’t go down. According to ONS data published on Wednesday, UK inflation remained at 8.7% in May, adding to the four-month streak of price rises exceeding forecasts. Core inflation was also up again in May, rising from 6.8% to 7.1%, an all-time high since 1992, and a stark indication we are not yet out of the woods. You can find our analysis here. As expected, this changed the question midweek from ‘will the Bank of England increase interest rates’, to ‘by how much’? You need only look below for the answer…
13 and counting – For the thirteenth time the Bank of England has put up interest rates, this time by 0.5 percentage points, to 5%. By taking rates to their highest level since 2008, the Bank is clearly determined to get a grip on rapidly rising prices. The minutes of the Monetary Policy Committee meeting on Thursday can be read here. Our Chief Economist Kitty Ussher had a busy week in the broadcast media discussing the latest economic developments. On Wednesday, she appeared on Channel 4 News (from 5.24) and Good Morning Scotland (from 2:42:26) and, on Thursday, she appeared on The World Tonight (from 20.46) and Newsnight (from 05.50).
Through the houses – The Economic Crime and Corporate Transparency Bill, aiming to deliver a suite of wider-ranging reforms to tackle economic crime and improve transparency over corporate entities, is currently making its way through the House of Lords, and is in the Report Stage. On Tuesday, Lord Johnson (DBT Minister of State) referred to comments made by the IoD in support of the Bill for its role in maintaining the integrity of the UK business system and the need for a finalised Act that works for the law-abiding majority at a time when businesses and businesspeople are under strain. The minutes of the session can be read here.
Green ambition – In a speech in Scotland this week, Sir Kier Starmer reaffirmed Labour’s commitment to 100% clean electricity by 2030, standing by its decision to not grant any new licenses for oil of gas exploration in the North Sea, should the upcoming general election swing their way. Labour believes this is an answer to both achieving net zero and ensuring energy security in this ever-volatile climate. This ambition is welcomed, but questions surround the viability and rapid timeline proposed.
Raise your voice! – Our latest Policy Voice survey is still live… but only for another week! Now is your chance to let us know how challenging the trading relationship with the EU is now for you, whether businesses are being impacted by the actions of other countries that distort the free market, your own business plans for capital expenditure, and economic confidence. So, if you’re an IoD member, check your inbox so you don’t miss your opportunity to contribute.
Next week watch out for…
Tuesday 27 June
- Economic Crime and Corporate Transparency Bill – report stage (day 2)
Wednesday 28 June
- Prime Minister’s Questions at midday
Thursday 29 June
- Oral Questions to the Secretary of State for Business and Trade (including topical questions)
- Data on mortgage approvals for the month of May will be released by the Bank of England, giving information on the effect on the housing market of interest rate rises.
- IoD Chief Economist speaking at the Northern Powerhouse Education Employment and Skills Summit 2023 in Sheffield
Friday 30 June
- Nationwide House Price Index data released for June 2023
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