Is the Future for the UK Economy Looking Brighter? Blog Is the UK Economy Finally Improving?

Is the Future for the UK Economy Looking Brighter?

Is the UK Economy Finally Improving?

Finally some good news for the UK Economy? Some positive results were presented in the latest survey of Chief Financial Officers by Deloitte this month. The regular survey includes a range of opinions from a leading panel of CFOs in the UK's corporate sector and is valued by many as a benchmark of business confidence and economic recovery. There were a number of key points in the report.

Greater Confidence in the UK Economy

Greater Confidence and Reduced Uncertainty Those interviewed said that financial and macro-economic uncertainty had reached its lowest point since the middle of 2010. Additionally, the respondents also had greater confidence since the last monthly survey that the eurozone would stay intact.

Access to Finance is a Crucial Factor for the UK Economy

Another positive highlight was about access to cheaper lending and in greater amounts, thanks to increased credit being extended by banks and building societies. This was markedly higher than at any point since the survey began in 2007 and is a result of factors, including increased business confidence, less bad debt than expected and the success of the government's Funding for Lending (FLS) scheme.

The International Situation also impacts the UK Economy

A better situation in many international economies was also flagged up as a positive sign. This is being driven by growth in emerging markets along with escalating demand in the Asia-Pacific and US regions. This is benefitting UK exporters and those with exposure to overseas markets. Many are shifting their business operations to more expansionary strategies. This has also led to a slow but steady move away from the climate of total cost control. However, those companies which are primarily UK-focused (defined by having less than 30pc of their revenue generated through exposure to overseas markets) remain markedly more cautious about domestic growth and business prospects.

Confident Sectors

Data released by the British Chambers of Commerce, via their QES survey (a Quarterly UK Economic Survey that aggregates the responses of over 7,000 UK businesses), shows that business confidence is particularly increasing in the services and manufacturing sectors.

Contributory Factors assisting the UK Economy

This confidence boost is judged to be caused by a range of factors, but predominantly greater levels of lending from banks. Recent date from the BoE shows, however, that banks still aren't widely lending to SMEs and fast-growth start-ups and entrepreneurs have been looking for alternative finance sources such as peer-to-peer lending and crowd financing, amongst other sources. There is still access to alternative and start-up funding through government schemes such as the Start-up Loans fund for young entrepreneurs and loans extended via the Regional Growth Fund scheme, but the signs do point to more innovative solutions being embraced by the SME sector.

Written by Niraj Joshi of Circle Square Talent – Finance & Accountancy Jobs London.

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