Inflation is expected to remain at 3% for February, but this is likely to increase to 3.5% in the middle of the year as a result of Autumn Budget tax measures and rising energy and fuel prices. The report also highlights that the labour market is only gradually easing rather than unemployment surging, with the unemployment rate expected to remain at 4.4%.

Karen Musgrave, Office Managing Partner in Preston at leading audit, tax and consulting firm RSM UK, looks at:

• the key concerns for Lancashire businesses in the run up to the Spring Statement;
• the impact of Autumn Budget tax measures and rising energy prices on regional growth;
• how the region can leverage its industrial strengths to combat a subdued labour market.

Karen Musgrave comments:

“With growing inflationary pressure and a subdued labour market, businesses in Lancashire remain cautious in the run up to the Spring Statement. Given the region’s industrial reputation and breadth of established and emerging advanced manufacturing and clean energy businesses, it has a key role in shaping the future of the North and driving UK economic growth. It’s also timely that Lancashire has secured a devolution deal which will ensure local leaders have greater control over local employment, enterprise and growth opportunities.

“The Lancashire Growth Plan outlines sustainable energy, nuclear and advanced manufacturing as industries with significant growth potential to transform the local economy. To achieve this, it’s essential businesses, local authorities and education providers work together to address challenges and improve employment prospects, innovation and connectivity. The importance of collaboration was further emphasised during the Convention of the North in Preston, for sustainable and inclusive growth. We’re already seeing this in practice with Silicon Sands at Blackpool Airport Enterprise Zone, which will be a digital-led campus for high performance companies.”

She added:

“But, businesses are held back by rising inflation and energy prices. There’s also the incoming increase to employers’ National Insurance contributions which could cause a slowdown in employment. Government therefore needs to leverage Lancashire’s industrial strengths by providing investment and incentivisation to drive growth. However, we’re still waiting on further announcements relating to the industrial strategy, which can’t come soon enough. It’s also important that the government consults with regional representatives to ensure a level playing field for the North to lead the UK’s clean energy ambitions.”