Ahead of the Chancellor's Autumn Statement on 17th November, Ed Rimmer, Chief Executive Officer of Time Finance, is calling on the Government to take action to stimulate consumer spending in light of anticipated tax increases and spending cuts.
“The Government has undoubtedly got some tough decisions to make to steady the economy, and cuts to public spending alongside tax increases, are looking very likely in this week’s Autumn Statement. While necessary, we need to learn from previous rounds of austerity; these measures alone don’t create conditions for growth. For these steps to be effective, they must be accompanied by measures to support and stimulate spending. The health of businesses, and the economy, depend on it,” according to Time Finance’s Ed Rimmer.
“With a looming recession, expected to last two years, and with a worsening cost of living crisis, a drop in consumer spending is something of an inevitability. Come Thursday, the public will see their take home pay packets reduce even further, bringing some understandable tightening of the consumer purse strings. In a recent Office for National Statistics report we saw Q2 household spending growth decrease by negative 2.7% in comparison to Q2 of the pre-pandemic year 2019.
“What the economy so desperately needs now, to flatten and shorten the recession, is for consumer spending to continue to flow and help support businesses. With one hand the Government will serve tax increases, but with the other they desperately need to help spark and stimulate consumer spending - either through special initiatives or properly financed support schemes.
“No matter what comes from Thursday’s Statement, what is certain is that businesses will need the vital support of alternative lending to get them through the coming months and year. In times of financial hardship, the big banks and traditional lenders tend to start closing their doors to supporting businesses, tightening the belt and putting in much stricter lending criteria. It is therefore vital that alternative lending remains open for business. We work with some 10,000 business owners already, and while they navigate the current landscape, we know that they - and many more - need our services now more than ever.
“In the run up to this year’s Autumn Statement, the late summer months saw the economy contract by 0.2% as energy bills and household spending ramped up a gear (or two!) It is certainly safe to claim that many will be waiting with bated breath as businesses and consumers now anticipate a tax increase for all, and a cut on public sector spending. What’s evident from these murmured predictions is that Rishi Sunak’s Government is taking every measure it sees fit to help curb spiralling inflation. Whilst this is a vital and necessary move for a country in financial woe, the back pockets of businesses and the general public alike will certainly feel the strain.”