As the UK prepares for a General Election in July, Grant Thornton UK LLP’s Economics Consulting Lead, Schellion Horn, outlines how business optimism is currently faring and what businesses are saying they most need from a future government
“As parties start to lobby for votes in the run up to July, the policy areas mid-sized businesses (often regarded as the engine of the UK economy) most want to see the next government focus on are investment in skills and training, reducing regulation and red tape, and measures to support the transition to net zero.
“Drawing from Grant Thornton’s April Business Outlook Tracker, it’s clear that mid-sized businesses are feeling more positive than they have for some time. The indicators for business confidence in the outlook of the UK economy and for their own revenue growth and funding position all surpass the Tracker's rolling average for the last three years. This optimism follows a period of record lows in the latter half of 2023, signifying renewed confidence in the UK's economy.
“With inflation reported at 2.3%, now also at its lowest level for nearly three years, it is perhaps close enough to the Bank of England’s target of 2% that a June interest rate cut may be on the cards. This positive outlook sets the stage for continued business confidence as the country prepares to head to the polls.
“However, the process of a General Election and the associated range of potential policy changes suggested can create uncertainty and directly affect business sentiment and confidence. We’ve seen from our Tracker that wherever there is a sudden, or unexpected, change in policy direction, mid-market confidence is correspondingly affected. But with UK debt levels high and recent warnings from the OECD for fiscal prudence in any election pledges, there may be less opportunity for the political parties to put forward differentiating, stand out economic policies, reducing the uncertainty created this time compared to previous elections.”
News release
General Election called for 4 July - Grant Thornton reaction
22 May 2024
As the UK prepares for a General Election in July, Grant Thornton UK LLP’s Economics Consulting Lead, Schellion Horn, outlines how business optimism is currently faring and what businesses are saying they most need from a future government
“As parties start to lobby for votes in the run up to July, the policy areas mid-sized businesses (often regarded as the engine of the UK economy) most want to see the next government focus on are investment in skills and training, reducing regulation and red tape, and measures to support the transition to net zero.
“Drawing from Grant Thornton’s April Business Outlook Tracker, it’s clear that mid-sized businesses are feeling more positive than they have for some time. The indicators for business confidence in the outlook of the UK economy and for their own revenue growth and funding position all surpass the Tracker's rolling average for the last three years. This optimism follows a period of record lows in the latter half of 2023, signifying renewed confidence in the UK's economy.
“With inflation reported at 2.3%, now also at its lowest level for nearly three years, it is perhaps close enough to the Bank of England’s target of 2% that a June interest rate cut may be on the cards. This positive outlook sets the stage for continued business confidence as the country prepares to head to the polls.
“However, the process of a General Election and the associated range of potential policy changes suggested can create uncertainty and directly affect business sentiment and confidence. We’ve seen from our Tracker that wherever there is a sudden, or unexpected, change in policy direction, mid-market confidence is correspondingly affected. But with UK debt levels high and recent warnings from the OECD for fiscal prudence in any election pledges, there may be less opportunity for the political parties to put forward differentiating, stand out economic policies, reducing the uncertainty created this time compared to previous elections.”