As mentioned in the September newsletter, the ACT was once again invited by the Bank of England to bring together a group of treasurers to hear more about the work and policies of the Bank and for the Bank to hear at first-hand how businesses were performing. These meetings are part of a programme of regular round table discussions organised by the network of local agents to make sure that the Bank of England have a well-rounded view of economic conditions and prospects. Details about the local agents can be found at https://www.bankofengland.co.uk/about/people/agents
Dr Joe Ganley, one of the agents and an economist by background provided a description of some of the work of the Bank and the different policy committees it operates. This includes the Monetary Policy Committee (MPC), the Financial Policy Committee (FPC) and a new one for me – the Prudential Regulation Committee (PRC). Dr Ganley also provided views on the Bank’s quantitative easing exit strategy, climate change and its outlook for the economy.
The assembled treasurers came from a wide range of sectors – from real estate, to manufacturing through to technology, and shared their challenges in an open environment.
Feedback from these treasurers included the following observations:
• Property occupancy differences between London and the regions
• Rent collections are improving and are getting close to pre-COVID times
• The stamp duty holiday did not have a noticeable impact on overall construction levels as it takes time to build and construction costs have been rising
• Impact of rising staff costs
• The different challenges between new and old buildings in reducing carbon footprints
• Challenges with supply chains – especially the tier 2 suppliers who typically have poorer credit and have suffered over an extended period of time and are now financially less resilient
• Delays to the supply of computer chips is having a knock on impact to suppliers to the manufacturing sector and reducing demand. This shortage is expected to extend into 2022 and will contribute to higher levels of inflation.
• The challenges with supply chains, heightened as a result of the pandemic and Brexit
• Haulage issues and rising freight costs which has required some companies to be more creative and innovative in how they manage the distribution of their goods
• Inflation with some thinking that it will be higher for longer
• Rising energy costs
• The outlook for vulnerable segments of our society.
It was interesting to hear first-hand how companies were prioritising the issues raised and about the huge knock-on effect on supply chains and the wider economy.
Sessions like these are a great way to build networks into the UK’s central bank and to hear how other businesses are faring. If you’d like to get involved, drop a note to technical@treasurers.org and we’ll try and include you in the next one.
