UK economy could be 'much better' in six months as prices are already falling, M&S boss says

18 October 2022, 09:25 | Updated: 18 October 2022, 09:28

Nick Ferrari questions Marks and Spencer Chairman Archie Norman

By Daisy Stephens

The UK economy is expected to be in a "much better" state in six months' time as prices are already starting to fall, the chairman of M&S has told LBC's Nick Ferrari at Breakfast.

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When Nick asked Archie Norman if the UK was heading for a recession, the M&S boss said there was "clearly going to be an economic crunch" but claimed things were beginning to look up.

"If we handle it right, actually I believe that in six months time we could be looking at a much better outlook," he said.

"Fundamentally this recession was caused by macro factors, not by the UK.

"It's caused by oil prices, gas prices, global inflation."

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He said some of the elements contributing to the economic crunch - such as wheat and gas prices, and global freight rates - were already on the way down.

"The gas price is actually well off its peak," he said.

"We do have a problem because inflation's eating its way through, but by June next year we could be looking at inflation coming down to quite low single digits."

Chairman of M&S Archie Norman speaks about Liz Truss

He then said the biggest threat to the UK economy going forward would be interest rates.

"Our problem then is actually probably going to be interest rates," he said,

"So the biggest threat to the economy at the moment is the impact on mortgages and households with rising interest rates and impact on financing business, of course."

Nick Ferrari puts Chairman of M&S Archie Norman on the spot

Mr Norman also claimed that the closure of 67 M&S stores over the next five years is part of the corporation's growth plan.

"A great hoo-hah was made about closing 67 stores but of course what you didn't mention, Nick, is we're probably going to open as many stores as we're closing," he said.

"And I don't regret the fact that when M&S closes in a town centre that people lament our departure, of course they do.

"And I understand that.

"But that we're really doing is replacing these glorious temples of the past - which are on three or four floors with asbestos in the ceilings so we can't change a lightbulb - and building great new stores that people want to shop in."

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He went on: "Our new stores are performing brilliantly and we'll end up with slightly less space than we used to have, but we've got too much space.

"And we've more than doubled our share online.

"So I think it is a growth strategy."

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