The Chancellor’s recent update to the UK’s growth forecast has placed concern over the economic outlook for UK businesses.
Despite revealing a commitment to reduce tax evasion, Rachel Reeves’s recent update also included downgraded growth predictions, raising questions regarding the struggles of many small businesses. The UK’s growth forecast for 2025 has been halved by the Office for Budget Responsibility, now standing at 1%, down from 2%.
Since taking office in October, Reeves has faced shifting global conditions that she has blamed for the UK’s continued economic struggles. To aid growth long-term, the Chancellor has committed to increase the prosecution of tax fraud by 20%.
However, many small and medium-sized enterprises (SMEs) have expressed concern over the lack of policy to immediately support their needs in the current climate. The Federation of Small Businesses’ Policy Chair has pleaded for credible, pro-small business plans particularly in light of:
“Confidence levels among small businesses [being] at their lowest since the first year of the pandemic.”
This year, SMEs have already faced an increase to National Insurance contributions for employers, while many have felt unaided by increases to employment allowance.
The impact of this lowered predicted growth, in addition to a lack of supporting measures and existing financial pressures, has resulted in further reluctance to invest for many SMEs. Businesses are, therefore, potentially missing opportunities to invest in technologies, hiring and new products that would aid their economic growth.
At AJL Finance, we provide SME business loans as we understand the importance of investing in the future of your business, especially through economic stagnation.
