RSM UK

December trading was billed as "make or break" for operators and a last chance to prop up the balance sheet ahead of a wave of new regulations and tax rises in 2025. In the end, overall like-for-like growth came in at an inflation beating 3.2% which is promising but perhaps not the barnstorming trading period that had been hoped for. More worryingly, the headline rate hides a significant amount of variety between different types of operators, with pubs up 4.7% but restaurants just 1.6%. That said, November and December combined have shown a marked improvement on what was a largely lacklustre 2024, so alongside forecast increases in consumer confidence there is hope that this trend will continue into 2025. It will certainly need to be if operators are going to navigate the cost pressures which will fall disproportionately on the industry from April. With many other levers already pulled, businesses will need to tread a fine line between raising prices to preserve margins whilst not making the offering less appealing to consumers. Read more here --> https://lnkd.in/e3rbm_GJ RSM UK #Consumer HQ Jacqui Baker | Chris Tate | Lisa Alty | Robyn Duffy | Hannah McCarthy

There were two big takeaways from today's labour market data. First, there is growing evidence that firms pressed pause on hiring after the budget. Employment rose by just 13k and the unemployment rate ticked up to 4.4% in November. Admittedly, we can't trust the official stats anymore. But the number of employees on payrolls has fallen fell in both November and December and all the surveys are thoroughly depressed. Taking everything together it's clear that demand for labour has cooled in the last few months and the unemployment rate is probably gradually rising. Second, the weakness in employment hasn't stopped pay growth from rising. It is tempting to blame the recent strength in wage growth on generous public sector pay growth, but its private sector pay that has jumped. This won't be enough to stop the MPC from cutting rates in February, but it will keep it cautious. We're still looking for one cut a quarter this year, but clearly the risks are for fewer cuts. The flipside is that strong pay growth means real wages are rising at a decent clip. Eventually that extra income should find it's way into stronger consumption, kickstarting that long-awaited economic recovery. #RSMUK #RealEconomy #Pay #InterestRates #MPC

The dip in inflation in December is welcome news, but it won't last long. Inflation will hit 3% in the spring. Inflation ticked down to 2.5% in December rather than staying at 2.6% as expected. This is welcome news for the Bank of England and makes an interest rate cut in February even more likely. However, most of the drop last month was due to a a big drop in airline fare inflation, but this has much more to do with when the ONS samples prices (it was early in December this year so prices tend to be lower) than any drop in underlying price pressures. Inflation will rise sharply over the next few months as firms pass on the huge increase in labour costs imposed on them in the budget, tax rises come into force and energy prices rise again. We see inflation rising to around 3% in the spring, before gradually falling back to 2% in early 2026. That means the Bank of England will have to be cautious about cutting interest rates, but it still leaves scope for at least three rate cuts this year. #RSMUK #RealEconomy #Inflation

I'm really positive about the announcements in the UK government's AI action plan today. In its level of detail and commitment from the top, it's a very welcome recognition of the potential for AI to boost productivity across the economy. Based on our work with AI at RSM UK here's what I think it will really take for it to succeed 👇 1) A recognition that productivity gains will mostly come from investments in AI adoption OUTSIDE the tech sector 2) Addressing the real disconnect that exists between the skills that business needs to adopt AI at scale - particularly data skills - and those that graduates and school leavers are currently bringing into the workplace 3) UK boards and executive teams having someone who really 'gets' digital and AI at the table 4) A clear and well understood AI governance framework for the UK, including the regulation of data protection in the post-Brexit era 5) Making Britain the most attractive place in the world both for AI talent such as data scientists, and for AI investment We have a long way to go in all five of these areas, but today's announcement is very welcome as a statement of intent, backed up for the first time by detailed actions. #AI #ArtificialIntelligence #Productivity #Economicgrowth

November has demonstrated a promising trend for UK hotels, with occupancy levels rising from 76.6% to 79.1% year-on-year. The festive season contributed to this positive shift, as the latest RSM UK Hotels Tracker reveals. 📈 Hotels occupancy rate in London saw increase to 82.8% year-on-year. 💷 Daily rates rose to £217.86 in London, as holidays remain a priority for travellers.   With room rates plateauing, hoteliers are focusing on improving occupancy rates to maintain profitability. However, the challenges posed by rising costs following the Autumn Budget call for strategic thinking. Explore my insights here: https://lnkd.in/eS9Ky7Tz   #Hotels #RSMInsights #UKEconomy RSM UK | Saxon Moseley | Jacqui Baker | Lisa Alty | Hannah McCarthy | Robyn Duffy