June 2024 economic and business overview

June 2024 economic and business overview

June 5, 2024

Economic signals are still mixed but positive overall

With the release of many more positive economic announcements in recent weeks, has the UK economy finally turned a corner as the government and the Bank of England are suggesting, or are we all getting ahead of ourselves? Only time can answer this question, but many, although not all of the signs are pointing upwards to one degree or another.


This is the big news, with a significant uptick in output of 0.6% for Q1 2024, the strongest reading for three years according to the Office for National Statistics (ONS). The key services sector rose 0.7%, production and manufacturing were up 0.8% and only construction disappointed with a weather-affected drop of 0.9%.

The ONS also publishes a figure for GDP per head of population, which can tell a different story. When adjustments are made for inflation and population growth, the latest figures show that GDP per capita was 0.7% lower than a year ago.

It’s worth noting that there’s a way to go with the economy only 1.7% bigger than pre-pandemic, which is the worst performance in the G7 apart from the stricken German economy.


Despite the headline fall in CPI from 3.2% last month to 2.3% now, close to the Bank of England target, there are real concerns about the obvious ‘stickiness’ of price rises in the all-important services sector. Services inflation is still 5.9%, virtually unchanged from 6% in March, while ‘core’ inflation remains high at 3.9%. These factors, together with the stubbornly high rate of pay rises, is likely to delay interest rates cuts until the Bank’s MPC meeting in August at the earliest. Any such delay will be a disappointment to many consumers and businesses.


Unemployment continues to rise, now up to 4.3% from 4.2% last month. The big concern is economic inactivity, with 22.1% or well over 9m of the workforce between 16 and 64 not seeking work. Of these, 2.8m are out of the labour market because of long-term illness.  Job vacancies fell again for the 22nd consecutive month. They now stand at 898k, down from a peak of 1.3m in 2022 but still higher than pre-pandemic.

Pay Rises

The Bank of England must be watching this statistic carefully. Despite another fall, average pay excluding bonuses rose 6% year-on-year, unchanged from the previous month. Taking inflation into account, these pay rises delivered a real term boost of 2% to household incomes. This makes them a two-edged sword for the economy. Whilst the worry is about their potential inflationary impact, they also boost consumer spending power.


After an unexpected downward blip in March, corporate failures resumed their relentless upwards march in April, when they were 35% up on April 2023 and 58% on April 2019 pre-pandemic. On a rolling twelve months comparison, 2023/4 is now 13% higher than 2022/23 and 46% on 2019/20. This is not necessarily bad news, because historically, insolvency peaks have marked the end of recessions and the start of recoveries. The question is: when will the peak be?

The most obvious features of insolvency filings in recent years has been the explosion in Creditors’ Voluntary Liquidations (CVLs) since the pandemic and the sharp fall in business rescues through the Administration route. Creditor enforcement through Compulsory Liquidation (CWU) has also fallen dramatically since pre-pandemic in 2019/20.

Administrations are starting to rise slightly, but the latest figures from the Insolvency Service suggest that CVLs may at last have tailed off. They are down to 79% of all insolvencies in the twelve months to April 2024 by comparison with 82% in the same period in 2022/23. Over the same periods, CWUs have increased from 11% in 2022/23 to 13% now.  Pre-pandemic, CWUs accounted for 20% of insolvencies.

Profit warnings

The level of recent commercial turbulence is highlighted by the startling announcement from consultants EY Parthenon that almost one in five (18.7%) of all FTSE companies had issued profit warnings in the twelve months to March 2024. The most common blame factors were contract delays and cancellations (24% of warnings), higher costs or weak consumer demand (17% of warnings), and higher interest rates (13%).

The slightly better news is that the 70 warnings in Q1 2024 were down 7% on Q1 2023. The FTSE sectors most affected in that quarter were:

  • Financial services – 11 warnings
  • Industrial support services – 9
  • Retail – 7
  • Pharma, personal goods, household goods and home construction (5 each)

The way forward

Until economic trends are more firmly established, business owners and managers should remain risk-aware but definitely not too risk-averse. These may still be uncertain commercial conditions, but there will still be opportunities for brave, nimble, and well-funded entrepreneurs.

Nevertheless, for any businesses finding the going significantly challenging, the wisest strategy will always be to seek independent expert advice about their situation and to do so early, as soon as the warning signs start flashing red.


If you are seeking professional advice for your business, Opus is here to help. You can speak to one of our Partners who can discuss options with you. We have offices nationwide and by contacting us on 020 3326 6454, you will be able to get immediate assistance from our Partner-led team.