Surveys published last week showed encouraging signs of recovery for British businesses, with better-than-expected growth and greater consumer confidence.
Those are rays of light punching through what remains an overall muddled picture for the UK economy, however. A recent study by a fintech firm, Tink, reported on by the International Business Times, indicated that 23% of respondents are considered financially vulnerable, defined as having salaries that cannot cover their basic expenses.
Inflation, a global issue, is having a profound effect on Britons, spurring a cost-of-living crisis. More than half of the respondents to the Tink survey who indicated economic vulnerability also said they expect their disposable income to reduce further in the year ahead.
What’s Encouraging
According to the International Business Times, April emerged as the busiest month for British businesses in a year. A reading of the S&P Global/CIPS UK Composite Purchasing Managers’ Index (PMI)—encompassing manufacturers and service industries—was at 53.9 in April, up from 52.2 a month earlier. Anything above 50 denotes growth, and April marked the third consecutive such showing.
Chris Williamson, the chief business economist at S&P Global, told the Times that the reading was consistent with quarterly gross domestic product growth of 0.4%.
With inflation persistent, the Bank of England, scheduled to meet in May, is poised to boost borrowing costs for the 12th time in a row.
What’s Discouraging
Inflation continues to pound consumers, not just in the UK but also worldwide. The Tink survey respondents expressed their pain in these terms, according to the Times:
- 58% of those considered “financially vulnerable” want financial services to be more widely available.
- 43% want help in managing their finances.
- 45% of respondents overall would switch financial institutions if offered better deals or opportunities to save money.
- 37% would switch if they were offered the specialized assistance they currently require.
Tink, a provider of open-banking services, said the report calls out for banking solutions that use data to identify financially strapped customers, direct help toward them, and remain in compliance with regulations governing the protection of such consumers.
On Open Banking
A recent Javelin Strategy & Research report, Open Banking Pushes Interoperability to the Payments Forefront, detailed how technology providers, merchants, and financial institutions must work together to take advantage of open banking’s seamless connectivity.
The result, according to report author Marco Salazar, Javelin’s Director of Tech & Infrastructure, will be products that meet clients’ needs and cooperation that heads off regulator concerns about anti-competition and the abuse of data privacy.
