The economy is on the road to recovery, with the UK services sector enjoying the biggest increase in news sales since June this October. However, inflation is preventing us feel all the benefits of growth.
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It seems the reopening of the economy and lightening of international travel restrictions contributed to the increased demand for services, pushing export sales to the fastest pace for more than three years. Companies need to keep up with the increased demand, as well as respond to any backlog that may have built up over the pandemic.
Welcoming a return to normalcy, the public has also flocked to the shops which has all helped instill a sense of real recovery. There was also an increase in employment in October despite the conclusion of the furlough scheme that has helped so many workers through the worst of the pandemic. As a result, the increase in workforce levels has been the second-fastest rise since 2014. It is a “job-seekers” market at the moment, with staff in high demand across a variety of sectors, enabling workers in “struggling” sectors to pick and choose where they want to be employed.
Unfortunately, it’s not all good news.
Thanks to stronger demand, staff shortages, and disrupted supply chains, inflation is on the rise. Operating expenses have increased, thanks to the need to attract staff with enticing salaries and benefits – and services charges have followed suit, hitting the highest rates since 1996. Companies aren’t prepared to handle the influx of new business after the pandemic restrictions loosened and perhaps didn’t anticipate customers returning at the rate they have.
The Bank of England voted to maintain the base rate at 0.1% on 4 November, but rises are still expected in the near future. Any hike might help reduce the rate of inflation, but homeowners or potential buyers will be the ones to bear the increased burden.
Keep an eye on your finances
Just how much of an effect all of this will have on the economy, in the long run, remains to be seen. Be sure to keep up to date with the ever-changing state of affairs and don’t hesitate to reach out with any concerns you may have.
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