Rob Perks is CEO of Wiltshire’s biggest business network Inspire.
Here Rob gives his thoughts and predictions following the shock results of the General Election, resulting in a hung parliament.
I’m no prophet and most people have been confounded over the last couple of years on many things, so it’s just my view but here goes with a stab at how events may unfold.
Despite the monumentally poor performance in their election campaign, one thing the Tories believe in is hanging onto power, so another election to try to get a different result in the near future looks highly unlikely as it would be a huge risk. Changing their leader in the short term looks unlikely too as it would be very disruptive and the public could see that as self indulgent. However, I wouldn’t bet on Mrs May surviving for a full term.
So what of policy and markets? My guess on policy would be for a slight loosening on fiscal policy to at least nod to the Corbinistas who were in the ascendancy. So, I would not expect too many nasty surprises on tax on either average incomes or small businesses and maybe even a tick up on taxes for the better off. Watch your pensions and investments carefully and other less visible taxes to compensate!
Interest rates are likely to stay low for longer due to the increased uncertainty in the economy from Brexit and May’s ability to get her budget proposals through Parliament. My guess is that the currency will be under a bit more pressure in the short term for the same reasons, but a more favourable Brexit deal from a business point of view may boost it in the medium term if that happens. We may well see consumer spending constrained a little more in the short term due to the increased sense of uncertainty, but that could well improve as the picture becomes clearer. More accommodative fiscal policy and more borrowing rather than less would boost consumers in the medium term.
So as a small business owner, how would I proceed? Investing for growth now, while interest rates remain low in order to boost capacity. Launch new products or services over the next couple of years, which although counter intuitive, could be a wise decision as long as the business can afford to wait a little for the payday. Getting ahead of the competition by swimming against the tide of others sitting on their hands could lead to a winning position over the next couple of years. We can expect more support for SMEs from Government who will be keen to keep the economy as strong as possible because they need the revenues and will want the feel good factor to be uppermost in consumer’s minds if a general election is forced upon them a couple of years out.
So take advantage of Growth Grants, funded training to upskill your staff and other support to implement projects to grow your business while they are available. To find out more about all the support available, contact Inspire on 01225 355553 or go to www.inspirebiz.co.uk