According to the Bank of England “underlying UK GDP growth slowed materially in 2019 as weaker global growth and Brexit related uncertainties weighed on spending”.
However, while Brexit and other uncertainties surrounding the UK’s departure from the EU are the main contributory factors to the most recent economic slow-down in the UK, amidst the tumultuous leave and remain rhetoric coming from Westminster and beyond, other negative aspects of the global economy have gained momentum.
For over 50 years, trade liberalisation has provided a positive stimulus for the global economy. Consequently, globalisation has become a familiar term, thanks to the dotcom economy and greater access to international trade.
Notably, whilst there has been a total of four global recessions since the Second World War according to the International Monetary Fund, (with the last recession in 2009 said to be the deepest of all), the last ten years have seen a remarkable increase in world trade.
So, where are we going wrong?
Recession is a natural part of the business cycle, with some experts suggesting that a recession will typically occur every ten years. However, whilst recessions may be perceived as being a natural part of business, it is also natural to try to find ways to counteract recession and stimulate growth. The question is how?
Political and economic debates surrounding Brexit consistently divides opinions, so too does the political and economic commentary around the broader economic slowdown.
With increasing speculation about when the next global recession will occur helping to fuel trade protectionism across the globe. In turn, this has only served to fuel greater scepticism among business owners and investors. According to the Bank of England “the fundamental shift in the direction of trade policy has affected global business sentiment, measures of trade and economic policy uncertainty have increased sharply during 2019 and surveys suggest that investors view a trade war as the top risk to the global outlook”.
This is further reinforced by the Financial Times Annual Survey that predicts “little change for UK growth throughout 2020 as Brexit worries continue to curb investment”.
In contrast, an article published by the National Federation of Finance Brokers titled “Shawbrook Reports a Resilient Post Brexit Outlook by Brokers”, Emma Cox, Shawbrook Bank’s Sales Director for Commercial Mortgages states, “despite the broker community showing some concern around the impact of Brexit, as the deadline draws near their confidence in business and the property market is still high. There is still opportunity for experienced investors to grow and diversify their portfolios, providing they do their homework and seek appropriate advice”.
In recent months there has been some mention of tax breaks for small businesses in one guise or another, and an increase in public spending, designed to help boost confidence and stimulate growth in the UK economy. No doubt, more clarity surrounding these and other domestic measures to protect our economy in the UK will be provided in the next budget.
In the meantime, despite the somewhat confusing and at times gloomy predictions for life after Brexit, it is important to note that UK businesses are not alone. There are a number of measures businesses can take in preparation for the UK’s departure from the EU. Equally, there are numerous business support services available across the UK that are able to offer free and impartial advice.
The Department for International Trade – provides useful guidance and advice on post Brexit import, export and trade.
The Enterprise Europe Network – brings together over 3000 business experts, situated in 60 countries, based in over 600-member organisations including Newable, assisting businesses looking to innovate, internationalise and grow.
The London Business Growth Hub Business Support programme – is a two year pan London initiative designed to take business support into local neighbourhood businesses across London.
The Inclusive Supply Chain Initiative – is a two year initiative designed to provide 150 London based SME’s of which 65% must be female owned, with access to new supply chains and finance.
Newable Commercial Finance – Newable Commercial Finance work with over 70 lenders across the UK to help businesses secure the finance they need to thrive and grow.
Newable Business Loans – provides unsecured business loans of £26,000 – £150,000 for UK business, trading for two years or more with a minimum turnover of £100k.
NewFlex – deliver and manage a range of branded solutions for every type of building, in every type of location, for every type of occupier across the UK. Including the flexibility to develop your own brand.