Business Investment Stumbles, as Brexit Uncertainty Continues

The lack of progress on Brexit is inhibiting business investment, the Institute of Chartered Accountants has said, as it downgraded its forecasts for economic growth.

British businesses have had much to overcome since the Brexit referendum back in 2016. First, the outcome led to the departure of half the EU workforce, then the subsequent political uncertainty led to plummeting consumer and business confidence, and the collapse of large majorities of the high street. Other incidents, such as cold weather have then added to anxieties and have left overall business confidence in tatters.

This political uncertainty, as well as the growing issue of late payment, have diminished the urgency of pursuing investment. Bad payment practices amongst the business community have led to bad and worst debt, and have left many businesses with little room to manoeuvre. The rising insolvency figures amongst firms in the UK, particularly for those trading on the high street, have turned the business landscape, and owners are merely focussing on survival.

Traditional methods of financing have shifted, with high street lending both too expensive and too inflexible for modern business. Instead, alternative finance platforms have taken centre stage, with crowdfunding and peer-to-peer lending some of the most popular. The government is doing too little to encourage investment further, with trade talks with Brussels still underway.

New forecasts from the Institute of Chartered Accountants have downgraded economic growth to 1.3 percent this year, with rising oil prices putting pressure on households and companies, and further diminishing investment appeal.

Businesses should be encouraged to invest, with the advancements of the British business landscape a large factor in boosting the UK image post-Brexit. While alternative finance platforms further accentuate these advancements, businesses should focus most on improving their financial position as well as claiming some extra cash. At the Credit Protection Association, our debt recovery services recover this extra cash for our members, while our credit management products ensure it is protected.

Michael Izza, chief executive of the Institute of Chartered Accountants for England and Wales, said: “The US, Australia, Germany and even Greece is expecting growth above 2 per cent and there is a danger that the UK’s sluggish growth will become acceptable at a time when other countries are gathering pace . . .

“The government . . . needs to make progress with the EU in helping to pave UK business success once Brexit takes place. Businesses are in an excellent position to take advantage of new opportunities but the lack of clarity and agreements made are a clear own goal.”

The Institute has reported economic growth in the UK to be 1.3 per cent this year, down from its previous estimate of 1.7 per cent. This would be the weakest performance for the UK since 2009.

As the UK edges closer to the Brexit deadline next year, retaining a competitive edge has become essential. The easiest way for this to be achieved is through the efforts of British business, ensuring new technology and equipment is embraced and emerging talent adequately skilled. If businesses are to survive the long term, their finances need to be improved and their financial future secured.

At the Credit Protection Association, we do more than provide our Members with extra cash, and instead ensure any new financial power is rightly protected. Our debt recovery services free up cash flow, chasing down unpaid invoices and residual debt and afford our members with opportunities to pursue new investments. In collaboration with this service, our credit checks, status reports and company directories ensure that our Members’ finances will not only allow for investment in the present but also the near and distant future.