SMEs are not out of the woods yet, with many businesses
struggling to grow in Britain’s changing economic landscape
Britain has been undergoing mass political turmoil in recent months. The UK’s economy shrank in November, caused by a downturn in manufacturing and a sharp drop in consumer spending in the run up to the election. In addition, Brexit continues to bring more uncertainty as SMEs scramble to put contingency plans in place as the UK prepares to leave the EU. With rising uncertainty for time to come, how will small businesses sail through the storm?
New figures released last week highlighted the ongoing concerns for the British economy, after GDP figures dropped by 0.3% in November from the previous month, according to statistics released by the Office for National Statistics. The alarming figure comes after major industries recorded a drop in output, decreasing by 0.6% for the three months to November. These included some of the UK’s most viable services sector, including retail, hotels and finance.
The Bank of England has now come under pressure to cut interest rates and stimulate economic growth. With a drop in GDP, companies effectively struggled to pass on higher costs to their customers, just merely squeezing profit margins. In addition to that, a rise in online shopping and higher business rates have brought crisis to Britain’s high streets as small businesses continue to suffer.
“These figures reiterate what we’ve found in our latest Small Business Index, in that small business confidence is down and after years of uncertainty, we aren’t out of the woods yet, Federation of Small Businesses (FSB) National Chair Mike Cherry said.
“Small businesses have been unable to plan, hire and grow amid political turmoil and a challenging economic landscape, so these GDP figures should act as a wakeup call to politicians to ensure they stand by their election commitments – now is the time to deliver.
Mr Cherry has urged the government to put small businesses at the forefront of their concerns, reform business rates and put in an effective Brexit deal to secure viable trade relations with the EU in order to improve the economy.
“The small business community must be kept front and centre when it comes to improving the state of the nation’s broadband, reforming business rates and our future trading relationship with the EU. It’s vital that we secure a pro-business trade deal which protects the three t’s: trade, talent and transition.
“Small firms are the backbone of the UK economy and this is why it’s more important than ever that they are given the support needed to invest, grow and succeed.”
With a changing political landscape and economic uncertainty, an increasing number of small businesses are now doubting their success and viability for the oncoming years. It is important for the government to honour their commitments and deliver changes to business rates, employment costs and late payments and maintain a future trading relationship with the EU.