Not surprisingly, there are a lot of news stories around that are focusing on the economy. The last fourteen to fifteen months have seen a huge roller coaster ride for many businesses and for some sectors of the economy it’s not been so much a roller coaster as a downwards slope with no end in sight.
What business owners, employees and business analysts want is some certainty and a clue as to how the economy is likely to perform over the next six months to a year. This helps planning for budgets and business direction.
Statistics and the economic reality
According to the Bank of England, in their most recent briefing, the UK economy is expected to ‘expand by 7.25% this year’ taking into account extra government spending helping to keep unemployment under control. The news headlines around this forecast were along the lines of ‘economy set for biggest growth in 70 years!’. That may be true and overall it is good news given the relentless flow of bad news over the pandemic. However, there is more to it than what the headlines tell us.
What lies behind the headlines is slightly more sobering. The forecast 7.25% growth is against the contraction of 9.9% in 2020, which was the largest contraction of the economy in 300 years. Even at the top end of the Bank of England forecasts the economy would only be the size it was in 2019. Growth in the economy has been stagnant for three years overall and let’s not talk about the debt mountain. Owch! Still, given what has occurred globally, that is still a pretty good bounce back given the devastation caused in sectors such as the retail, restaurant and travel.
Where is the current business focus?
The focus among businesses (besides the relaxing of covid restrictions) is currently on the end of the furloughing scheme in September. As we approach that time, many businesses will be having to make tough decisions about the future of some of their employees. Many firms have decided to use the enforced changes through the pandemic (remote working, changing client demand patterns etc) to move their business models in new directions.
Long hard looks are being given towards some of the overheads that have been traditionally been connected with running office based businesses. Do you need that expensive office space? How many support staff do you need? Are all those client lunches and events actually producing anything at the end of the day? Has the firm got too many bosses and not enough fee earners? There will sadly be some nasty shocks waiting round the corner for many people.
What can you do as a business?
At rhw we have posted articles on several occasions about the need to prepare for whatever the new economic landscape brings on the business front. If you haven’t already done it, have a think about whether your existing terms and conditions suit the new economic realities? Do you need to refresh your payment terms? Do you need some legal advice on how to restructure your business or on employment law matters or on your commercial property requirements?
Use the summer to sort out your business model. It may even be that you end up with a shopping list of new talent you want to bring into the business. Given that there may be a large number of people coming onto the market in September, it would be a wise thing to have your ‘wish-list’ together before that time.
rhw’s experienced legal teams can help on all of these matters and a lot more besides. Call the Commercial Team (Employment and Property Law as well) on 01483 302000 or email them on
