Bank of England Breakfast Summary September 2018

Cornwall Chamber of Commerce is delighted to work with the Bank of England hosting bi-annual breakfast meetings which give Cornish businesses the opportunity to hear essential economic insights first hand.

The Chamber offers 26 local businesses exclusivity to discover the latest updates from the Bank of England and engage with them to build a picture of the local economy which is then fed in to national policy. Chamber staff always attend these meetings as they give us incredible insight into both the challenges and opportunities for the Cornish business community.  

Following the financial crisis, banks have become many times more capitalised than pre-2007 to mitigate against financial shocks. This makes them more resilient in the preparation for Brexit, giving us an indication of the rate rises to come so banks are, by nature, better prepared for change. They seek to find out how well other sectors are preparing to mitigate risks surrounding Brexit.

 In relation to wages and the impact on the labor market, despite low unemployment 2.9% nationally, yet lower again in Cornwall, businesses are struggling to find employees with the appropriate skills. It has been suggested that the economy must invest in achieving better productivity, which will consequentially increase growth within businesses in the Duchy. It has become apparent that households are spending less as they are feeling the pinch of the food price increase. Is the wage inflation that is starting to come through at a rate of around 2.9% going to make more than a scratch in proposed domestic inflation?

Donna Keyhoe from the Bank of England suggests that nationally, businesses are planning changes such as setting up new warehouses or distribution units in new areas to secure a contingency plan in terms of logistics and recruitment surrounding Brexit.

In relation to the hospitality sector it has become apparent that restauranteurs are using measures such as creating contracts with overseas suppliers to insure fixed prices for the next two years to prepare for Brexit and planning for a 30% increase in domestic pricing. It was also noted that there has also been a noticeable increase in tourism from Germany. Will this open more export opportunities for Cornwall?