The main problem for corporate Britain is that pretty much everything is getting more expensive.
It is tempting to see the madness in Westminster and conclude that hapless politicians are the sole cause of Britain’s economic woes.
Liz Truss’s government began to self-immolate in late September
86 profit warnings
blamed lower profits on rising costs.
That is the result of both the war in Ukraine and a much weaker pound.
Labour is becoming dearer, too: average pay in the third quarter of 2022 was 5.4% higher than in the same quarter the previous year.
In sunnier times, firms might have been able to protect their margins by passing more of the price rises on to their customers.
But the three-way squeeze on households—from higher energy, food and borrowing costs—makes this much harder.
Consumer confidence has crashed (
hough many households built up excess savings during the pandemic, there is scant evidence so far that they will spend them in a way that would offset a recession.
many companies are starting from a position of strength, with high profitability
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