UK Freezing Weather Impacts Economic Growth, Derails Previous Predictions
The beginning of this month, the UK began to brace for more than snow and freezing weather. Experts warned that the bad weather would send a chill over Britain’s economy and lead to a short-term hit to growth. This is disappointing news after the encouraging expectations at the beginning of 2018.
Many economists had forecasted that the first three months of this year would experience a 0.4% GDP growth. Now, the weather is expected to impact sectors like retailing and construction. The retail industry will feel the effects of the harsh weather conditions as well. Supply chains of big businesses and restaurants and the travel sector will also be affected.
Retail expert Phil Dorrell says that the snow and ice could be a “disaster” for the high street, since more people will be staying home and doing their shopping online. The Federation of Small Businesses (FSB) said that many of high streets have been desolate during the severe weather conditions. The chairman of the FSB, Mike Cherry, stated that firms “will feel the pain of the temporary drop in trade.”
In fact, economist Howard Archer, chief adviser to the forecasting group EY Item Club, says the weather is going to cut the 0.4% GDP growth in half. He says if this weather persists for too long, it could reduce the first quarter GDP to 0.1% or 0.2%.
Archer went on to say, "There will obviously be a significant hit to UK economic activity.” However, he also stressed that it is "important to bear in mind that much of the lost activity will eventually be recouped".
In the coming weeks, these businesses may discover that they need a boost of cash to cover day-to-day costs, like paying their employees. Rent, utilities and other expenses may become a challenge as well. A merchant bank account may be the solution they are looking for, not just for payment processing services but for fast, flexible business funding.
"Even among those which have battled on, many have been affected by customers or supplies being unable to reach them. The financial cost of severe weather events on small firms averages at around £7,000 for each affected business.”
“It comes at a time when many have been affected by rises in business rates, increasing employment costs and the effects of the weak pound," Cherry explains.
Author Bio: Electronic payments expert Taylor Cole is a passionate entrepreneur who also enjoys to write, play guitar and camp. Bestpaymentproviders is UK's best merchant bank account company, serving both traditional and high-risk merchants.