Anyone with even a passing interest in the UK’s economic landscape will have noticed some troubling warning signs.
It now seems all but guaranteed that taxes will rise in the Autumn Budget, and each passing day makes the outlook appear even more grim.
Recent figures on the Chancellor’s borrowing have made the business community very unsettled.
We are going to examine how this increased borrowing could ultimately harm your business and what you could do to lessen the impact.
How high is the Government’s borrowing at the moment?
In June alone, the Government borrowed £20.7 billion.
Several factors are driving this surge in debt.
Global economic volatility has dented the UK’s financial resilience, and the contentious welfare reforms have thrown the Government’s fiscal plan off course.
Meanwhile, the Spending Review’s promise of hefty investments has left a sizeable void in public finances.
For now, the Chancellor appears to be trying to plug that gap with sizeable loans.
What does such high borrowing mean for your business?
Relying on borrowing is a quick fix to a deep-seated issue.
Regardless of who is at fault for the current economic downturn, the prospects are not looking good.
Policymakers are debating a wealth tax as a way to shore up revenues without overburdening lower-income households, but there is concern it could drive affluent individuals abroad rather than prompt them to pay more.
Sceptics argue that claims of millionaires fleeing are exaggerated to scare the Government off the idea, yet even rumours alone could rattle decision-makers.
As a business owner, you must also weigh the overall impact of other economic pressures.
Consumers today have less disposable income, squeezed by soaring grocery bills and rising inflation.
Average monthly rent has climbed by £221 in just three years, and mortgage rates remain harshly punitive as inflation drives them higher and higher.
With household budgets under strain, companies may find it tougher than ever to get customers to part with their hard-earned cash.
Higher everyday costs, paired with climbing inflation, threaten to intensify cash-flow challenges across sectors.
If you sell non-essential goods or services, planning for an economic slowdown is vital as most shoppers simply will not have extra funds to splurge.
Be prudent with new investments, as revenues could dip.
Sooner or later, the Chancellor will reveal how she intends to plug the fiscal gap.
Whether we welcome that solution is another question entirely.
Don’t let your business suffer from the Government’s borrowing. Talk to our team today!