Corporate change in the Cumbrian economy: third quarter (Jul-Sep) 2023

Mulvey, Gail ORCID logo ORCID: (2023) Corporate change in the Cumbrian economy: third quarter (Jul-Sep) 2023. CRED Economic Bulletin Volume 18. CRED Research, University of Cumbria.

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This CRED Economic Bulletin gives a review of corporate change in Cumbria for the period July to September 2023.

In the last Bulletin, we reported that GDP was flat-lining and although the figure for 2023, Q2 has since been revised upward by the ONS from 0% to 0.2%, it is once again estimated to have shown no growth in the third quarter (see Table 1). In output terms, there was a 0.1% fall in the Services sector which offset a 0.1% rise in Manufacturing output and a 0.1% rise in Construction output with broadly flat output in the Production sector. Higher financing costs along with greater economic uncertainty is said to be inhibiting business investment (something which we appear to be seeing also in Cumbria – see next section). The largest contributor to the fall in services over the three months was real estate activities which fell by 0.4% due to the steady rise in interest rates that we have seen. The Bank Base Rate was raised to 5.25% on 3rd August, the 14th consecutive rise since December 2021. However, in meetings of the Bank of England’s Monetary Policy Committee, in September, October and November, the decision was taken to maintain it at 5.25%, allowing the interest rate effects on inflation to work through the economy. Indeed, inflation has continued to fall, falling sharply in October to 4.6% from 6.7% in September, its lowest level for two years, on the back of cheaper gas and electricity. Gas costs fell by 31% in the year to October 2023 and similarly, electricity costs by 15.6%.1 That said, gas and electricity prices are still a lot higher than they were two years ago as can be seen in Figure 1 where their index level is compared to that of the CPIH (Consumer Price Index including owner occupiers’ housing costs) as a whole. The Bank of England predicts that inflation will not reach its 2% target until the end of 2025. “There are also upside risks to inflation from energy prices given events in the Middle East.”2
1. Source: ONS Consumer Price Inflation, UK: October 2023, online data release, section 3, 15th November 2023.
2. Bank of England Monetary Policy Committee Meeting, November 1st 2023, Summary.

Item Type: Report
Publisher: CRED Research
Departments: Institute of Business, Industry and Leadership > Business
Centre for Regional Economic Development (CRED)
Additional Information: The CRED Economic Bulletin series is produced at the Institute of Business, Industry and Leadership at the University of Cumbria, UK.
Depositing User: Anna Lupton
Date Deposited: 21 Nov 2023 17:06
Last Modified: 13 Jan 2024 15:45


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