Last week marked 12 months since the first UK lockdown and how life has changed for both business and individuals alike. This is not only a time for reflection but also a time to focus on recovery now over 50% of the UK population has been vaccinated meaning there is a light at the end of the Covid tunnel.
But what next? We are surrounded by the very same challenges we faced before we went into lockdown comprising of potential trade wars with China and disputes with Europe now framed in a post Brexit world. Of more concern, we now also have a huge bill to pay as a country for the borrowing which kept the country afloat during the Covid storm.
One thing that is certain is that there will be a recovery. As the UK economy is nothing if not resilient but the starting point is very low. I say this with a heavy heart as last year the UK economy contracted by nearly 10% which was the largest contraction seen since the ‘Great Frost’ in 1709 though the world was very different almost 300 years ago and the UK’s position within it was also very different.
The UK economy has been kept afloat during the crisis using the usual levers of fiscal stimulus of not increasing the tax burden to pay for increased borrowing and monetary policy of pumping eye watering sums into the UK economy.
The growth rates for the UK economy have been forecast to be between 5-6%.
If the forecasts turn out to be accurate or even half true, it could mean that the UK could outperform Europe. This would mean that UK plc has to be ready to capture this spurt of economic growth and turn it into something tangible. It is incumbent on all business owners as well as the financial sector to ensure that businesses start to look at new prospects which they are able to exploit.
We should not forget that the UK is the 8th biggest manufacturer in the world so we must use that double edged sword of investment to cut through and improve UK productivity by new methods of working which have been learnt through the pandemic. We have to bear in mind that there are also new export opportunities given that a lot of businesses who previously traded with Europe (simply because it was on their doorstep), have to consider potentially onshoring elements of their production in order to preserve efficiencies.
Do not forget, a lot of employees harbour visions of starting up their own businesses because they know they can improve on what they have learned from their employer. It is this entrepreneurial spark that needs to be nurtured. I am not harking back to the Thatcher era but I genuinely do believe that investment within businesses and support for employees will reap dividends especially when added to new ways of working to increase productivity.