Risk & Economy » Economist Insights: Mohammed Chaudhri, chief economist and director of market intelligence at Experian
Economist Insights: Mohammed Chaudhri, chief economist and director of market intelligence at Experian
The CFO spoke with Mohammed Chaudhri, chief economist and director of market intelligence at Experian, about the impact of rising inflation on the UK economy and what businesses can do to protect margins amid this challenging economic backdrop
Welcome to the Economist Insights series, where The CFO speaks with leading economists about the latest economic trends and challenges impacting businesses with the aim of providing senior finance leaders with the necessary guidance they need to navigate their organisations accordingly.
In the first episode of the series, The CFO is joined by Mohammed Chaudhri, Chief Economist and Director of Market Intelligence at Experian, to explore the impact of rising inflation on the UK economy, how interest rates hikes will place further pressure on working capital, and what businesses can do to protect margins amid this challenging economic backdrop.
2:45 Inflationary pressures “squeeze” margins further
15:08 Consumer confidence hit hard by rising inflation
20:13 The implications of a recession on the labour market
22:47 Early rays of sunshine amid all the doom and gloom
Given that inflation is set to increase further, what advice do you have for businesses on how to budget and forecast over the next 12 months amid rising fuel and energy costs?
Chaudhri: As businesses plan for the future, [they] have to adopt a scenario planning mentality. Simply having one case that we are all reading off and planning for isn’t going to be helpful. [Businesses] are going to have to make sure that they run those scenarios before they emerge, because then, and only then, will [businesses] have the plans to actually enact and make sure that they can maintain margins.
So the first thing I would say, when you’re forecasting numbers, we’ve mentioned a couple of times here in terms of inflation going above 11%, but what happens to your margin if inflation hits 14%? What happens to your margin if inflation is even higher than that? These have to enter business planning cycles now.
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