28 Jan 2022

Accounting for Economics

By Lorraine Morris

ACMA CGMA

University of Wolverhampton

The current economic environment is a fascinating mix of topical events.  From the macroeconomic shifts created by BREXIT to the market changes caused by the pandemic.  In addition, there are other economic issues including the dilemmas regarding interest rate increases and the rising cost of living.  Every UK business and all households have to be accounting for economics in 2022 on the balance sheet and in daily budgets, respectively.

By way of context, international economics has shown how the world is reliant on global supply chains.  For example, tensions in Ukraine regarding Russia have contributed to rising commodity prices in gas and oil, which in turn has adversely affected the price of petrol and energy that have recently quadrupled.  This is reminiscent of the oil price shocks of the mid-1970s because industrial and domestic costs are rising at a dramatically fast pace.

Overall, increases in UK consumer prices have risen by 5.4% in the twelve months to December 2021.  This outcome has resulted in an ongoing cost of living crisis because wage increases are lagging at 3.8%.  This has affected families on low and fixed incomes disproportionately, prompting a change in how the Office for National Statistics (ONS) calculates inflation after an inspirational campaign by food writer Jack Monroe.

Of course, this has affected our local economy and markets as well. Dr Ian Jackson, Senior Lecturer in our Finance, Accounting and Economics Department was invited by the Chartered Institute of Management Accountants (CIMA) to deliver a talk at Chester Races in 2019 on “BREXIT: Economic Prospects for the West Midlands”. CIMA, founded in 1919, is the world’s leading and largest professional body of management accountants.

Following this success CIMA have asked Ian to give a successive talk in April 2022 at a roundtable breakfast event to an audience of senior finance professionals. The topic will be “The Economic Outlook for the West Midlands Economy” and will explain the recovery phase of the business cycle as the national and regional economy grapple with the many challenges that lie ahead. The event will promote discussion around strategy and leadership and we are proud to offer our assistance and support to one of our partner professional bodies.

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Lorraine Morris is head of the department of finance, accounting and economics at the University of Wolverhampton Business School.