On Wednesday 8th July, the chancellor of the exchequer, Rishi Sunak is expected to provide an update on the current state of the UK economy and what should be expected.
As a result of the national lockdowns, a recession bigger than the 2008 financial crisis was triggered. During the height of the Coronavirus crisis from March to April, GDP fell 20.4%, forcing the Bank of England to drastically lower interest rate to 0.25% then to 0.1%, the lowest ever.
Although economic uncertainty continues and the government has started to allow more businesses such as restaurants and pubs to reopen, many will be wondering what happens next? How will the economy recover? How fast?
All of these factors are dependent on the spread of Covid-19 in the upcoming months. Nevertheless, unemployment has reached a record high and is expected to continue to rise once the furlough scheme has been lifted, so what does the government have in mind to kick start economic recovery?
- The eventual reopening of all businesses; In June, when the retail sectors were permitted to open, sales spiked 12%.
- Financial support for struggling sectors; The government has pledged £1.5bn to support the arts sector from collapsing.
- Allocating £14bn for primary and secondary education.
- More funding for the healthcare sector and hospitals.
- Encouraging recruitment; The PM plans to recruit 20,000 police officers, as well as introducing wage subsidies as part of their ‘Back to work’ campaign.
- Job guarantees; aimed specifically at under 25s who are more likely to suffer with long term effects of unemployment.
- Temporary cuts in employer national insurance contributions.
- Temporary reduction in VAT on stamp duty.
To conclude, we will have to see what Wednesday brings and what decisions the government has made. Businesses have used Akoni's platform and tools to manage their cash effectively through these turbulent times and whatever happens we will continue to innovate for our clients.
About Akoni: Akoni is an award-winning UK cash platform, which provides a marketplace to SMEs and charities, as well as to individuals through our white label distribution partners including IFAs, wealth platforms, accountants and SME hubs. Akoni uses innovative technology to personalise cash planning solutions for clients, and also provides a full API solution to banks and insurance clients.