The UK economy – why we should be optimistic about the future
Here at Inspire, we believe there are four good reasons to be optimistic about the future for the UK economy (and we recommend talking to your financial advisor about using a key tax break before the budget). These four reasons are as follows.
This is finally rising, raising hopes that, if sustained, could bring a rise in living standards. Output rose by 1.4% in the 3 months up to June – the fastest pace of growth since 2016, according to the ONS.
This would mean inflation is likely to stay low for longer and consequently means a similar outcome for interest rates. Improving productivity is essential for a growing business to beat the competition in its market and is a focus for Inspire as we develop a growth plan with our clients.
We have said for the last two years that we believe a Brexit deal will be struck despite all the talk of a “no deal crash” and if this proves accurate then there is upside potential in our markets and our economy which have been held back by uncertainty.
Many more positive noises are coming from Brussels and the UK and behind the scenes, Ministers still believe the odds of a deal are 95%. A “no deal” would be a problematic outcome for the EU as well as the UK as neither is properly prepared for the implications it brings with it.
Ireland’s economy, who of course are remaining in the EU, with a huge percentage of its exports coming to the UK, would be massively impacted and EU negotiators will be concerned about that. It’s interesting that the Irish PM is increasingly softening his tone toward the UK in recent weeks.
Having spent three decades in business, new Trade Minister, Baroness Fairhead, says she sees “huge opportunity with or without Brexit.” She is at the heart of efforts to strengthen ties with key markets all over the world.
With 18 trips already under her belt, she is “utterly convinced” there are tangible opportunities from India and Japan to Peru and Lithuania as well as China. Official estimates are that there are at least 400,000 businesses in the UK who could export but don’t, so expect to see more support coming from Government to support companies starting to export or widening their reach into other overseas markets.
The markets are too absorbed by the current uncertainties to have reflected the upside potential if these predictions come true. Now is the time to invest for future growth and opportunity ahead of your competition who are sitting on their hands.
On a separate note, with Pension Tax relief costing the Treasury £40bn per year, it must be a potential target for savagery in the budget.
This is a hugely valuable tax planning tool for entrepreneurs and we strongly recommend talking to your financial adviser about taking advantage of this tax break while you can.
We will happily have an initial discussion on the benefits of this, if you haven’t done anything about it yet, and refer you to one of our expert partners if there is an opportunity for you to benefit from this flexible, tax efficient tool.