The economy has shown a mixed picture recently with wages, excluding bonuses, rising at their fastest annual pace since 2008 between March and May combined with a slowdown in employment growth suggesting a loss of momentum in the labour market. The good news was the unexpected rise in retail sales in June, reversing the fall seen in May. However, economists have said that the uncertainty that still surrounds when Brexit will happen and crucially, what form it will take, is likely to slow down spending in the coming months
UK – Forecast
Official forecasters have said that the UK is in danger of slipping into a full-blown recession. The Office for Budget Responsibility (OBR) has suggested that the latest PMI survey and economic data show an economy that has ‘flatlined at best’ in the second quarter.
The survey data for June was particularly weak and while this could be partly attributed to an unwinding of the stockpiling done by businesses ahead of the previous Brexit deadline of 29th March, a more general weakness may well persist and intensify as the next deadline of October 31st nears. Official data due to be released on August 9th is expected to show a slight fall in GDP for the April-June period, the first quarterly contraction since late 2012. Another contraction in the third quarter would mean that Britain is in a recession. The OBR said, “Surveys were particularly weak in June, suggesting that the pace of growth is likely to remain weak. This raises the risk that the economy may be entering a full-blown recession. The fiscal risks posed by recessions depend on their depth and persistence, the sectors most deeply affected, and the pace at which the economy subsequently recovers.”
The economy has shown a mixed picture recently with wages, excluding bonuses, rising at their fastest annual pace since 2008 between March and May combined with a slowdown in employment growth suggesting a loss of momentum in the labour market. The good news was the unexpected rise in retail sales in June, reversing the fall seen in May. However, economists have said that the uncertainty that still surrounds when Brexit will happen and crucially, what form it will take, is likely to slow down spending in the coming months.
The OBR has stated that if the UK leaves the EU without a deal then confidence will be damaged, and investors deterred and with higher trade barriers pushing down the value of the pound we will see a further contraction of 2% to the economy. All of this could lead to an additional £30 billion a year being added to public borrowing by the 2020/21 financial year the OBR went on to say.
This uncertainty about exactly when Brexit will happen, or what form it will take has been a frustration to business for the past couple of years. Nobody knows exactly what the impact to business or the wider economy will be, and this has made it difficult for businesses to prepare.
One thing that is certain is that businesses with a healthy cash flow will fare better than those without. Poor cashflow is the leading reason for businesses to fail and ensuring that there are robust measures in place to protect this is key as we move into uncertain economic times.
Daniels Silverman already partners with hundreds of businesses to support them with a white label credit control service that ensures that businesses are paid on time for their services or products. By working alongside you we can remove the burden it places on a businesses’ time and resources to get invoices paid. You get a professional service with a high level of success, and your client has an open line of communication to resolve any queries. We don’t charge commission on the invoices collected, we charge a flat monthly fee, allowing you to control exactly how much you spend depending on the number of invoices to be collected. We also provide a same day service, so you always know where your accounts are up to.
If you would like to find out more about how the services offered by Daniels Silverman could help to support your business, whatever size, then please do get in touch either via the website or call to speak to someone directly. We look to hearing from you and finding out more about how we can help.