At the beginning of July, an article appeared in City AM, stating: ‘UK business bosses most pessimistic since the start of the pandemic’.
It started by describing business leaders as ‘disheartened’, saying that ‘soaring inflation and Brexit pains’ had ‘crippled confidence’. (In the interests of balance and fairness, we should point out here that City AM has consistently been against Brexit.)
The article quoted said that the Directors’ Economic Confidence Index – a measure of economic confidence from the Institute of Directors – had dropped to minus 60 in June, the lowest since Covid first took hold in 2020 and down from the minus 45 recorded in April.
Inflation at 40-year highs was cited as the most frequent reason for the gloom, followed by worries about post-Brexit trade, the shortage of skilled workers, higher taxes and the UK’s general economic conditions.
Two days later, entrepreneur James Dyson added his six penn’orth to the pot, casting doubt on the UK’s stated intention to be a ‘science superpower’ by the year 2030. The UK, said Dyson, was “massively underproducing engineers” and he saw “no drive to make science a large part of the UK culture”.
A day after Dyson’s comments were published, Chancellor Rishi Sunak resigned, with Boris Johnson being forced to follow suit in the same week. The political uncertainty – and the continuing race to be our next PM – can hardly have helped the bosses’ mood.
But are they right? And are their views representative of the small business owners in our client bank?
Whether they’re right or wrong only time will tell. What we can say – with some confidence – is that their views are not representative of the owners and directors of SMEs we deal with. Yes, there are challenges – and inflation and rising costs means that the cash flow has to be watched ever-more-carefully – but as one of our clients put it, ‘When are there not challenges?’
Whisper it quietly but even some members of the IoD are not quite so pessimistic. At the bottom of the survey which gave City AM its headline, 33% of the directors surveyed said they were planning to increase employment this year, and 31% were planning to raise investment.
Having come through a global pandemic, the business clients we deal with are determined to embrace what lies ahead and to continue building their businesses.
We will certainly be right at their side, equally determined to make sure that they and their families enjoy the fruits of the businesses they’re building, and advising them on how to pass their wealth to future generations in the most tax-efficient and effective ways possible.