Margaret Jobling, Chief Marketing Officer, NatWest Group and President, ISBA
Keynote Speech at LEAD 2023
How often have we said we are living and working in unprecedented times over the last few years?
We have economic and political upheaval impacting every corner of our country. While some of these pressures are unique to the UK, many are the consequence of global issues.
The Financial Times recently conducted its annual poll of leading UK-based economists and forecast that the UK will face one of the worst recessions and weakest recoveries in the G7 in the coming year.
The reasons behind these predictions were varied including the long tail of the coronavirus pandemic, Russia’s war in Ukraine, political uncertainty and the impact on trade and employment caused by Brexit.
A recent piece of research from Enders Analysis looked at household income and concluded that the UK’s cost-of-living crisis will reduce household disposable income by 4.3% in the following financial year.
Rising inflation, interest rates and energy prices will mean consumers seek to tighten their belts - pulling back on additional spending and deferring plans for that next holiday, replacing existing products, or considering home improvements.
Torsten Bell, Chief Executive of the Resolution Foundation, has forecast that although double-digit inflation is set to disappear in 2023, the cumulative impact of the last 12 months will mean that the disposable income of many households will continue to fall.
A survey, conducted by the Resolution Foundation, found that people are over four times as likely to think that their financial situation became worse rather than better during 2022. Half of families in work said they were trying to cut back during the festive period.
Indeed, average household disposable income fell by 3.3 per cent in 2022, or £800 per average household – the biggest annual fall in a century.
It doesn’t make for inspiring reading for businesses or consumers.
Our industry is not isolated from any of this, of course. As Marketers we are all facing complex decisions and must seek to navigate the best course through 2023.
However (famous last words) - I do remain optimistic and some of the more recent publications in the marketing press give us some reasons to be cheerful. Ian Whittakers recent Campaigns article talked about how advertisers should be “cautiously optimistic” in 2023 which, he argues is driven by Corporate advertisers profits holding up pretty well coupled to continued consumer spending. This certainly chimes with the behavioural data we are seeing in the Bank.
Similarly, the latest IPA's Bellwether Report, made for surprisingly upbeat reading. Budgets in Q4 2022 were up for the seventh consecutive quarter and respondents were largely expecting strong growth in the coming year.
Who knows how 2023 will play out and if I could predict what was going to happen I certainly would not be stood here. What I do believe we should all stay very focused on is the things we can influence.