Director’s update: Globalised Economy

Time to recharge the batteries?

In the good old days, August used to be a quiet month – a time to recharge the batteries and reflect on workplans for the autumn. This year, it has felt very different as many of the challenges facing businesses, citizens and the economy as a whole do not take holidays. And with a Conservative Party leadership contest in full swing, the CBI has been working behind the scenes in order to hit the ground running on 6 September. We will be reaching out to the new Prime Minister and their Cabinet on CBI priorities on how to address the cost of living and energy crisis, ensuring that government measures are growth enhancing and pave the way for a sustainable, inclusive and export-led recovery.

The UK’s wider context as part of the global economy

Whilst much of the focus of the new government is likely to be domestically focussed in the first few weeks, political and economic decisions must be taken within the wider context of the UK as part of the global economy. UK-EU relations remain poor despite the positive co-operation in response to the war in Ukraine. Finding a solution to the current impasse on the Northern Ireland Protocol is a top priority. The CBI has been clear: EU inflexibility and UK unilateral action are not the answer.  Both sides should redouble their efforts in the autumn to find a negotiated solution based on flexibility and compromise.  And it is here that business engagement can help in brokering that agreement.

Growing forces for deglobalisation

More broadly, there have been growing forces for deglobalisation both at home and across the world, which carries huge risk for many economies. The inability to source critical resources, inputs and goods, at prices we can afford, will harm our economy at home. The current economic environment calls for a new approach to doing trade – an approach that manages international relations with care and builds new partnerships and alliances. It will become just as important where we source from as export to. Political rhetoric must not outpace reality.

A globalised economy increases output and productivity, boosting living standards and offers consumers greater choice at competitive prices.  Business has a key role in shaping and leading the international agenda and the CBI will be working with the new government to help make the UK a more competitive, dynamic and future-focussed economy.