A triple blow of Brexit, Covid and Russia’s invasion of Ukraine is said to have badly affected the UK economy, increasing the gap between the prosperous and less well-off parts of the country as the spending power of many workers will likely remain below pre-pandemic levels until the end of 2024.

As inflation currently sits at 7.9%, the NIEST forecast suggests that it will continue to remain above the Bank of England’s 2% target until early 2025 and this means that the cost of living will also continue to rise.

For the poorest 10% of the UK, an income boost of £4,000 a year would be needed to have the same living standards as they enjoyed in the year before Covid-19, while wages in London are expected to be 7% higher by the end of next year than in 2019, regions such as the West Midlands they are forecast to be 5% lower.

Dr Yi Ding, Assistant Professor of Information Systems at the Gillmore Centre for Financial Technology, said: “The UK economy has taken a significant hit over recent years and it is no surprise that uncertainty remains, impacting areas such as FinTech investment and funding for academic research. The UK aims to cement itself as a leading global hub of innovation and place to do business but without a stable economy and access to investment, the research institutions, startups and SMEs that are vital to driving the UK economy will continue to fight an uphill battle. Promoting research and development despite turbulence is essential to unlocking new areas of economic growth through technology, ideas and the creation of highly skilled jobs.”

Khalid Talukder, Co-Founder of DKK Partners addressed: “As we continue to ride the wave of uncertain economic times, business owners may feel concerned about the current outlook, however, we must remain confident and continue business as usual to support future economic growth. For the economy to grow, we need innovation. The UK has its sights set on Tech Superpower status and without SMEs supporting this mission, acting as key innovation drivers, it will not be possible.”

“Businesses have faced tough times over the past few years however those who have remained robust can have confidence that better times are ahead. The government has been offering business support since the beginning of the year, more recently announcing the digital sandbox to support business innovation, supporting SMEs and promoting international relations, and as the UK fights for economic stability, businesses should continue operations as usual to support the growth of the economy.”

Steven Mooney, CEO of FundMyPitch, added: “As turbulent economic times continue to flood the news headlines, more must be done to support the lifeblood of our country, the small and medium-sized businesses that drive innovation and economic growth. The UK lacks financial support and funding towards smaller businesses and entrepreneurs looking to develop their ideas and grow.”

“When you consider the fact that they not only support innovation, but they offer increased job opportunities, supporting the future stability of the country, the importance of support and investment is clear. While funding is needed, government support and initiatives must also continue to be provided and alongside investor interest, SMEs can receive the support they need to boost the nation’s economic growth.”

Prof Stephen Millard, NIESR deputy director for macroeconomic modelling and forecasting, said: “The triple supply shocks of Brexit, Covid and the Russian invasion of Ukraine, together with the monetary tightening that has been necessary to bring inflation down, have badly affected the UK economy.

“As a result, we expect stuttering growth over the next two years and GDP [gross domestic product] to only recover to its 2019 quarter four level in 2024 quarter three. The need to address the UK’s poor growth performance remains the key challenge facing policymakers as we approach the next election.”