Making Good in Q4

In its Monetary Policy Report August 2024, the Bank of England announced a 0.25% cut in interest rates to 5%, explaining that:

“Over the past couple of years we have raised?interest rates?to slow down price rises (inflation). It’s working. Inflation has fallen a lot over the past 18 months. Inflation in the UK fell back to our 2% target in May and June. In part due to the fading impacts of global shocks like the war in Ukraine and Covid. In part due to higher interest rates.”

Following the recent General Election, the PwC report “UK Economic Outlook July 2024” gave an overview of the new Labour government’s growth ambitions for the nation.

“In our main scenario, we expect national output to grow by around 1% this year, 1.7% next year and even faster in 2026. One of the new government’s top priorities is to kickstart economic growth with an aspirational goal of achieving the ‘highest sustained growth in the G7’. Assuming this strictly translates to economic growth, rather than a more holistic measure of prosperity, our analysis shows that this has not been achieved in decades.

“In fact, based on current medium-term projections of economic activity across the G7, the UK is more likely to come in third place, behind the US and Canada. A significant factor driving this result is demographics; the UK is expected to see very limited growth in its working-age population over the next decade. Therefore, future growth must rely on increasing the capital stock of the UK economy and using existing resources more productively. Both of these are areas where the UK has struggled in its recent history.”

Engines for Growth

In the Make UK Manufacturing Outlook Q1 2024 published in March, Richard Austin, BDO’s Head of Manufacturing, commented:

“Manufacturers have continued to show their ability to overcome wave after wave of challenges, but they cannot continue to do this indefinitely without some more long-term support from the Government. We have reached a tipping point where the ramifications of regional disparities may permanently affect the manufacturing sector, which could hamper future growth.”

Among the engines for growth in the sector are the high tech innovations that are revolutionising the manufacturing landscape in the UK, driving efficiency, precision, and competitiveness in the global market. Significant advances are being made through the integration of Industry 4.0 technologies, which include the Internet of Things (IoT), big data analytics, and artificial intelligence (AI).

These technologies enable real-time monitoring and predictive maintenance of machinery, reducing downtime and operational costs. For instance, AI-powered analytics provide insights into production processes, optimising workflows and improving product quality.

ANR Manufacturing believes strongly that UK manufacturers and companies like ourselves in precision engineering and electronics have a strong part to play in delivering the government’s ambitions for growth. Backed by the right policies and given the right resources, we can deliver highly successful outcomes.