Economic experts have warned of 5 years of lose economic growth and a 60 per cent change of a recession due to being unprepared for geo-political tensions and socio-economic circumstances, according to the National Institute for Economic and Social Research (NIESR).
A triple blow of Brexit, Covid and Russia’s invasion of Ukraine is said to have badly affected the UK economy, increasing the gap between the prosperous and less well-off parts of the country as the spending power of many workers will likely remain below pre-pandemic levels until the end of 2024.
As inflation currently sits at 7.9 per cent, the NIEST forecast suggests that it will continue to remain above the Bank of England’s 2 per cent target until early 2025 and this means that the cost of living will also continue to rise.
For the poorest 10 per cent of the UK, an income boost of £4,000 a year would be needed to have the same living standards as they enjoyed in the year before Covid-19, while wages in London are expected to be 7 per cent higher by the end of next year than in 2019, regions such as the West Midlands they are forecast to be 5 per cent lower.
Dr Yi Ding, Assistant Professor of Information Systems at the Gillmore Centre for Financial Technology, said: “The UK economy has taken a significant hit over recent years and it is no surprise that uncertainty remains, impacting areas such as FinTech investment and funding for academic research. The UK aims to cement itself as a leading global hub of innovation and place to do business but without a stable economy and access to investment, the research institutions, start-ups and SMEs that are vital to driving the UK economy will continue to fight an uphill battle. Promoting research and development despite turbulence is essential to unlocking new areas of economic growth through technology, ideas and the creation of highly skilled jobs.”
Khalid Talukder, Co-Founder of DKK Partners addressed: “As we continue to ride the wave of uncertain economic times, business owners may feel concerned about the current outlook, however, we must remain confident and continue business as usual to support future economic growth. For the economy to grow, we need innovation. The UK has its sights set on Tech Superpower status and without SMEs supporting this mission, acting as key innovation drivers, it will not be possible.”