Only 6% of UK businesses have confidence in the UK Government to deliver economic growth in 2023.
The survey, by accountancy network Moore UK, found that the majority of UK businesses do not have confidence in the Government to stimulate economic growth this year.
There is considerable pessimism about the UK’s economic prospects in 2023. The International Monetary Fund (IMF) forecasts that the UK economy will shrink by 0.3% this year and perform the worst out of all G7 nations. The UK is forecast to be one of only two G7 economies – the other being Germany – to contract in 2023.
Maureen Penfold, Chair of Moore UK says, “Business confidence in the UK economy has yet to fully recover from the mini-budget fallout. Business owners have been through a great deal in the past three years and are far from convinced that the near future looks much more positive.
“With interest rates expected to rise again, inflation still close to its peak and insolvencies increasing, businesses are still braced for economic turbulence. That’s going to continue at least in the medium term.”
Businesses have major concerns about value of hybrid working
Moore UK’s survey also found that many businesses have major concerns about the value of hybrid working. 58% of businesses say that hybrid working makes it more difficult to train their people, while 64% believe that those working remotely miss out on the social aspect of the business.
58% of businesses surveyed also believe that some employee benefits – such as company cars, travel allowances and London-weighting of salaries – should be reduced for people who work remotely.
Maureen Penfold says: “Hybrid working is a long way from reaching universal acceptance. There’s a broad recognition that hybrid working causes problems that haven’t been adequately addressed yet.
“Hybrid working can’t be a one-size-fits-all model where everyone is automatically able to work remotely. Every business is going to have to find a way of working that suits their specific situation.”
90% of UK businesses say rising costs will impact their profitability this year
Moore UK’s quarterly survey of owner-managed businesses also found that 90% of businesses say they will struggle with rising costs this year. The Bank of England forecasts that inflation will drop to 4% by the end of 2023, but CPI inflation was recorded at 10.1% in March 2023.
Maureen Penfold adds, “Businesses are in dire need of a fall in inflation to relieve pressure on their margins. Many of them are counting on inflation dropping to 4% this year as the Bank of England has predicted. If it doesn’t, the number of businesses closing is going to keep rising as it has over the last few months.”