According to Lloyds Bank’s Business Barometer businesses ‘ belief in their trading prospects for the next 12 months rose to 56% in July, up from 44% in June, the highest it has been since 2017.
Deloitte’s latest survey of chief financial officers has also found that optimism among senior executives at some of Britain’s biggest businesses has increased after Labour’s landslide general election victory.
It said risk appetite is up, fears about uncertainty have retreated sharply, and revenue growth predictions are rising.
Growth in the UK economy has also been faster than expected in the first quarter of 2024.
So it’s all looking good.
Or is it?
Chancellor Rachel Reeves has announced a £22bn budget deficit and already made cuts worth £5.5bn including ending winter fuel payments for most pensioners, halting reforms to the social care system and abandoning several major Conservative projects.
She has also warned there may be tax rises in the autumn.
Late payments worsened in June, according to accountancy firm Xero, and Andy Haldane, the former chief executive of the Bank of England, has warned that growth is too “sulky” in the UK.
Although he said he is “very optimistic about the UK,” arguing that there are “clusters of innovative brilliance across the UK, among our universities, among our businesses and among our people.”
Investment company Grant Thornton has outlined five key things needed to preserve and strengthen the outlook for businesses.
The government should provide a period of stability, certainty and fiscal prudence, improve access to capital to free up funds for investment, incentivise investment in skills development, create an internationally competitive tax system that promotes investment and introduce measures to promote net zero.
Optimism or pessimism can have a profound effect on business activity so it is essential that there are measures being put in place in which businesses can feel confident.
How are you feeling about your business future now the election Is over?