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By James Davey
LONDON, March 29 (Reuters) - The boss of British fashion
retailer Next said on Wednesday he did not think the
downturn in the UK economy would be long lasting and anticipates
a sharp recovery in 2024.
Recent gauges of Britain's economy, such as consumer
confidence data, have suggested it could sidestep a prolonged
recession which had been widely predicted last year.
"We've never thought that the downturn would be
long-lasting," Next CEO Simon Wolfson told Reuters after the
retailer reported full-year results.
"The genesis of the problem is a post-pandemic supply side
squeeze," he said, pointing to reduced availability of factory
capacity, constrained freight routes and higher fuel prices
following Russia's invasion of Ukraine.
"As those supply side problems begin to ease, inflation is
likely to ease, and as long as there's no structural damage to
the economy we can see no reason why we shouldn't see quite a
sharp recovery next year," he said.
Wolfson, also a peer of Britain's ruling Conservative Party
who sits in the upper house of parliament, said the UK had "a
big opportunity" if it tackled some of the longer term supply
side issues it has, particularly in planning, economic migration
and energy supply.
Next said it would not need to increase prices this year by
as much as previously thought.
However higher costs for wages and energy are still expected
to reduce its profit this year.
"The problem is if everyone else is talking about a force 10
hurricane, someone who says 'I think it's going to be a storm'
is often accused of believing that it's going to be sunshine,"
said Wolfson.
"We're not optimists, but we're just not as pessimistic as
many of the reports we read."
Looking to the outlook for Next's price inflation in 2024,
he said on balance it was more likely to be lower than 3% than
higher than 3%.
(Reporting by James Davey, Editing by Paul Sandle)
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