Regaining confidence in the UK economy

Regaining confidence in the UK economy

By Khalid Talukder, co-founder of DKK Partners

As the UK prepares itself for the challenges that will be presented in 2023, the nation can hold out hope that the negative economic predictions that were provided late last year, and earlier this year, may not be quite as bad as initially thought.

The recent IMF statement has produced some rising concerns throughout the nation, however, it is not all doom and gloom as the UK’s initial forecast has been upgraded offering a positive outlook.

As the government revealed its Growth Plan towards the back end of 2022, steps have been taken and actions have been made to initiate this plan and lead the UK to more prosperous times highlighted by the fact a predicted technical recession has been avoided.

The high growth agenda has prompted support and investment to be shown towards key areas such as the finance and technology sectors who will contribute heavily to the recovery of the nation by supporting job creation, while acting as global hubs encouraging international investment.

2023 will certainly present challenges with a likely bumpy road ahead, however, as continued support towards high growth sectors is on the cards, businesses can slowly regain the confidence they need to get back out to the marketplace and restart business as usual, increasing trading, building out workforces, and playing their vital role in future economic success. However, the government needs to act quickly to resolve public sector pay dispute as failure to do so will result in a headwind slowing growth.

Supporting the Financial Services

Key actions in the recovery of the UK economy will be the support of high growth industries as well as SMEs and entrepreneurs alike that can present themselves as global leaders in the coming years, supporting the governments drive for international growth. For example, the financial services which the Chancellor highlighted the UK economy has always depended on in his mini budget speech.

The more recent Spring Budget has proven the government is remaining committed to the growth agenda revealing key actions such as the Edinburgh Reforms which are set to promote a competitive marketplace across the financial services.

It is clear the government sees the further potential that can be unlocked in the financial services which acts as a significant source of jobs and tax revenues for the nation bringing in £173.6 billion to the UK economy in 2021 acting as an economic powerhouse.

Recent government statistics show that the financial services sector was the fourth largest in the OECD and now the government are taking the stance of protecting the global position it currently holds.

Investment into these key areas will act as an important step towards economic recovery and retaining and maintaining global positions that will allow increased international imports and exports while attracting further global investment.

Regaining business confidence

As the government continues to invest in key areas that will support the growth of the industry businesses can begin regaining the confidence they have been longing for after a turbulent few years. However, while investment into high growth sectors is positive, small and medium business can also be optimistic about the direct support the government has recently shown, however this commitment needs to be maintained long term.

On top of investment into key areas, the government are committing to breaking barriers for businesses, recently removing 2.2 million worth of international trade barriers to promote global activity and support businesses by offering increased opportunities for international presence. This will help move ‘trade friction’ and allow businesses to do more commerce efficiently and effectively.

Small and medium businesses provide a backbone to the nations economy, offering innovation and employment opportunities, and while investment into large, and key, industries is a vital step in achieving growth, removing barriers that halt business growth will also play a role in economic recovery.

Businesses have faced years of instability, rising costs and an unpredictable economy making trading increasingly difficult and forward planning almost impossible. As the nation comes out the back end of a turbulent few years, the government is now recognising the difficulties businesses have faced by providing the support they need to succeed.

Earlier this year the government SME’s action plan was revealed outlining how the government plans to support small and medium-sized businesses over the next three years.

For businesses who remain anxious about increasing spending and continuing operations as they would have a few years ago this is fantastic news and highlights that the government is not only committed to promoting economic growth via high growth industries but recognises the importance small and medium businesses play in economic recovery.

Over the last few months, the government has proved that it is taking the growth goal seriously, firstly by avoiding the technical recession we all feared and secondly by making investments and commitments to supporting technology, industries and businesses that will allow our nation to flourish.

We can enjoy regained confidence in the state of the economy, and while the position of the economy is not yet stable, and unpredictable circumstance could still arise, the government has shown it is fighting against the negative predications of late last year and is leading the nation to retain its position as a global powerhouse.

For businesses, they should now look to returning to business as usual, getting back out into the marketplace to grow their organisations to support the nation and achieve the economic goal, which if all goes to plan, will see growth over the coming years.