Bankers and ministers must heed business voice

Delicate moments lie ahead for our economy, and what is needed now is both a Treasury and a Bank of England that are capable of both listening to what business is saying and acting with nuance – not the usual blunt instrument.

At our August Chamber Diamond Ambassadors session for our patron Lancashire businesses, meeting with the Bank of England’s NW agent, we heard the vast majority of our businesses are still feeling confident in growth to come, despite all the pressures in play, and we heard of the beginning of a welcome softening in raw material prices.

Are these signs that interest rate rises have started to do their job? And that now might be best to watch and wait and not stifle further economic growth with too hasty a repeat of interest rate hikes?

We all know the sequence of events - Covid, raw material scarcity and price rises, transport difficulties and costs escalation, oil prices ballooning, international conflict, energy prices soaring, galloping inflation, leading to wage rises, price rises and on and on.

But if raw material prices are starting to turn down, what is needed now is pressure where it really matters - cap businesses’ energy prices, cap energy taxes, support our workers with their energy costs, but do not depress trade further if you don’t have to.

Be careful bankers and new ministers that you don’t punish the consequence of inflation, rather than the cause.