The Bank of England Governor, Mark Carney, is warning 1 million households on low incomes that they are about to see their living standards squeezed due to the post-Brexit fall in the pound. The pound has hit an eighteen year low against most major currencies.
But what about the 5.4m UK SMEs who, in total, employ over 15m people, over 60%, of all UK employees? Thankfully, HEART of business can offer many of these businesses some help.
For some businesses, the Brexit decision was good news. For others, not so good. However, the Government has made itself clear; Brexit means Brexit. As we all struggle to work out exactly what that will mean for our businesses, and when the impacts will be felt – it is still over two years before we actually leave the EU!
The effects of Brexit
The Bank of England, anticipating that the economy will need some help, has reduced interest rates and started further quantitative easing. The pound has fallen to record lows against most major currencies and uncertainty is impacting investment decisions. Other indicators are still difficult to interpret, but;
- economic growth in quarter three 2016 is down on quarter two,
- consumer confidence is showing a slight downward trend, albeit ahead of many forecasters expectations,
- wage growth is slowing down, seen as an indication of employer’s nervousness over the economic outlook,
- price inflation is set to rise to probably 4% in 2017,
- unemployment is set to rise by 22%, from 4.9% to over 6%.
What does this mean?
So what will this mean for the many SME’s in the UK who, according to the recent pre-Brexit 2016 productivity survey, ranked sixth in comparison with the other developed economies of the G7?
On the positive side, for those not importing goods and services, they may avoid the double-digit inflationary pressure due to the falling pound. For those who export their goods and services, there may be the opportunity to be more competitive or to make larger margins. For the rest of the UK’s SMEs, we are most certainly in for a rough and uncertain time, faced with a combination of low productivity, falling demand and rising costs.
HEART of business can help
If you recognise these challenges and need input from experienced experts to help support and guide you through these challenges, then get in touch with HEART of business.
With over 30 business experts, ranging from experienced finance directors to strategic marketeers, sales consultants, procurement strategists, and supply chain experts, we have a unique combination of skills in our team.
HEART of business is a unique group of B2B service providers, working collaboratively to achieve amazing business growth, and who are committed to achieving breakthrough results for their clients.