It is hard for businesses to make future plans at the moment because of the unknowns in both global politics and finance.
On the one hand Trump’s policy on tariffs could go any number of ways for the UK after he threatened to impose a 50% tariff on UK Steel and aluminium.
However, he has delayed that for the UK if not for other countries, pending ongoing talks with the UK PM.
Meanwhile, various wars show no signs of abating particularly in Russia and Ukraine. The UK government has declared it intends to set defence spending at 3% of GNP.
We shall see what emerges from the chancellor’s spending review next week.
Word from businesses is mixed.
Bosses in the UK’s services sector were more optimistic last month according to a survey of bosses and many were looking forward to improved sales and investment over the next six months.
The S&P Global purchasing managers’ index (PMI) rose from April’s 27-month low of 49.0 to 50.9, when a figure above 50 indicates a period of expansion.
The American Express Business Barometer survey has found that 68% of SME leaders believe their businesses are resilient following recent external challenges. Optimism is growing, with 73% confident about their company’s future – up 4% from last year – and 71% expecting revenue growth in the next 12 months. Leaders themselves also feel resilient, with 71% saying they are well-equipped to handle business challenges.
Despite facing ongoing challenges linked to tax hikes and tariffs, British manufacturers saw an increase in performance in May. S&P Global’s latest PMI hit 46.4 in May, compared to 45.4 in April.
But other media report flag up concerns.
Tina McKenzie from the Federation of Small Businesses says the loss of over 150,000 payroll jobs since Labour took power serves as a “stark warning” regarding the impact of government policies on employment.
Business confidence fell steeply in the three months to May, according to the Confederation of British Industry’s (CBI) Sector Services Survey, with tax hikes and higher wages having an impact.
So for the time being we are advising caution in making plans and keeping a close eye on cash flow and balances.
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And if you want to talk over your current business plan or the likely consequences of insolvency we’re happy to help.