High Street businesses have enjoyed an early summer boost after a tough start to the year.
Retail and hospitality chiefs say that footfall was up last month, as more people shopped and socialised. But they have stressed more needs to be done to tackle sky-high inflation.
The news comes as Jeremy Hunt prepares to use a speech at London’s Mansion House to set out his vision for growth.
Tomorrow the Chancellor will assure the nation he will not rest until inflation is defeated.
He will also announce reforms designed to turbo-charge the growth of Britain’s most promising companies, and deliver better returns for pensioners.
Mr Hunt will say he wants to use post-Brexit freedoms to encourage dynamic global firms to list on the UK stock exchange.
A key goal is transforming the pensions landscape so that funds invest in companies with great potential. And he will welcome an agreement with leading pensions firms to put five percent of their investments – up to £50billion – into high-growth firms.
There are around 28,000 defined contribution pension schemes in the UK.
The Chancellor wants to see consolidation across the sector and will encourage local government funds to merge. He will tell his audience tomorrow: “I want to lay out plans to enable our financial services sector to increase returns for pensioners, improve outcomes for investors and unlock capital for growth businesses.”
The plan got the thumbs-up from Michael Moore, chief executive of the British Venture Capital Association, last night.
He said: “We welcome the Chancellor’s recognition of what we have known to be true for a long time – that pension savers are losing out.”
The Chancellor will also say there can be “no sustainable growth without first eliminating the inflation that deters investment and erodes consumer confidence”. And he will promise the Government will continue to honour its “responsibilities to those struggling” because of rising prices.
But hopes of a major package of tax cuts in a pre-election giveaway this autumn are receding.
Rishi Sunak made halving inflation this year a personal priority but it has remained stuck at 8.7 percent.
Mr Hunt said in an interview yesterday: “We will not countenance tax cuts if they make the battle against inflation harder.”
He said that he and the Prime Minister are “doubling down on our efforts to tackle inflation because we both believe – down to our last drop of DNA – that no long-term sustainable growth is possible in an economy with high inflation”.
Leading business voices have pointed to the threat posed by high costs while acknowledging the resilience of the consumer. Andrew Goodacre, CEO of the British Independent Retailers’ Association, welcomed a more buoyant June.
“There has been a bounce back, more footfall, more people spending,” he said.
“We now need that to carry on for the rest of the summer without any more nasty surprises.”
Kate Nicholls, chief executive of UK Hospitality, said that this season is “quite critical”.
“The positives are we are seeing good demand,” she said. “Four in 10 are saying they prioritise spending on eating and drinking out, despite the cost-of-living pressures.”
And Harvir Dhillon, of the British Retail Consortium, said that the economy had been “holding up quite well over the past half-year or so”.
Higher interest rates will squeeze budgets but he said that consumer confidence has “risen quite a lot”, suggesting people are “feeling better about the economic situation”.
He also expected “stronger than expected wage gains” would buoy consumption. But he warned: “The tax environment is less favourable than during the 2010s, whether that’s business rates, or additional red tape post-Brexit.”
Cutting costs for businesses, he said, “allows them to drop the prices of goods faster”.
