The International Monetary Fund (IMF) predicts that the UK economy will grow by 0.7% in 2024 and by 1.5% in 2025. However, businesses are experiencing increasing difficulties in hiring staff, according to the British Chambers of Commerce (BCC).
Adding to recruitment challenges, some workers are resisting their employers’ efforts to return to the office, citing the benefits of remote and hybrid working. According to MakeUK and BDO, England saw a decrease of 34,000 manufacturing jobs, with the construction and engineering sectors most affected, followed by the transport and logistics industry. Of those who responded to the BCC survey, three-quarters reported recruitment difficulties.
Virgin Startup has also reported that 50% of SME founders are concerned about their survival, with most citing the cost of living crisis. Meanwhile, inflation remains at 2%, according to the Bank of England, so there will be no interest rate cuts this month, although there is hope for a cut in August.
PwC has stated that the government could provide a long-term boost to Britain’s public finances by simplifying the tax regime. Begbies Traynor, the Manchester-based restructuring firm, has warned that insolvency activity is expected to remain “elevated” into 2025 despite improvements in the broader economy.
While the media often focuses on negative news, it is worth remembering that the UK’s new government has only been in place for a little over a week. Addressing problems that have been 14 years in the making will take time. Therefore, we advise patience, cautious optimism, and strict control of cash flow for the time being.