Message from the Chairman of the Aga Khan Economic Planning Board

I am writing to update the Jamat on the current economic situation in the United Kingdom and how the Aga Khan Economic Planning Board (AKEPB) is ready to support the Jamat.

The outlook for the UK economy remains uncertain. The effects of Brexit and the Covid-19 pandemic are likely to be with us for some time to come. In addition, there are fresh challenges in the form of inflationary pressures, labour shortages and widespread supply-chain disruptions. As a result, we urge the Jamat to remain cautious.

Many sectors have enjoyed a short-term pent up demand boost following the relaxation of physical distancing rules and the lifting of travel restrictions. Households and businesses have received unprecedented governmental support since the onset of the Covid-19 pandemic. These support measures are now being scaled back. A 1.25% tax hike to fund social care will come into effect next April and it is our opinion that this may be the beginning of a multi-year process to put government finances on a more stable footing. Further details were communicated in this week’s Autumn Budget and Spending Review. In addition to the prospect of tax increases, there is the possibility that the Bank of England may implement contractionary monetary policy through increasing interest rates in the coming months to manage inflation. For businesses or homeowners with variable rate loans and or mortgages, this may result in a rise in monthly debt service payments. Conversely, this could be welcome for savers via increasing their return at a low risk, although there is uncertainty as to whether this will keep up with the inflation rate.

The rapidly changing economic landscape presents concurrent opportunity in a plethora of different areas. For instance, de-carbonisation, which is now a key focal point for the government. Indeed, the UK has announced a net zero strategy as part of a series of measures to transition towards a greener and more sustainable future. One such measure is encouraging households to switch from gas boilers to low-carbon heat pumps by offerings grants of up to £5,000, which in turn will create more work for tradesmen such as electricians and plumbers.

Another opportunity stemming from the pandemic is the ability to seek remote work through either employment or setting up online businesses. There have been numerous examples of murids expanding their online businesses during this period and you can listen to some of their stories here. These Jamati members have kindly agreed to act as mentors to anyone looking to start a business from home, so if this is something that is of interests, please contact us at akepb@iiuk.org

Alhamdulillah many in our Jamat have built successful enterprises in sectors such as real estate, hospitality and care homes to name a few. However, if you have been successful, we urge you not to be complacent. Technology is disrupting every sector and we must evolve. We would encourage all businesses to embrace technology and start preparing for these challenges.

Regarding your personal finances, we advise you to continue to exercise prudence. You may have noticed prices have started to rise for many everyday items including groceries and energy consumption. The latter in particular may be causing some concern; please see the attached guide for our guidance. Unfortunately, it is unclear when these price rises will moderate. As mentioned before, interest rates are likely to increase soon and so the Jamat should prepare for higher housing-related costs.

The Aga Khan Economic Planning Board (AKEPB) runs a number of programmes and makes available resources to support the Jamat with furthering careers, building businesses and managing personal finances. AKEPB also provides confidential assistance to individuals on any queries you may have regarding your personal finances, employment and businesses Please visit the.ismaili/uk/akepb for a list of some of our initiatives or reach out to the AKEPB on akepb@iiuk.org

Finally, I would like to thank the many volunteers in AKEPB for their tireless efforts in serving the Jamat. Should you be interested in joining our team and supporting your fellow murids, please get in touch with me or any member of the Board.

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