“News of rising interest rates was expected; the economic outlook has deteriorated fast over the recent months. The news contributes to clouding business prospects at a time when inflation and energy costs soar and national insurance increases. There’s also an unusually high public debt-to-GDP ratio, and coupled with the continuing effect of the Ukraine-Russia war on most of Europe, means businesses and governments continue to be plagued by uncertainty. In addition, Brexit might have acted as a shock amplifier through larger trade barriers (the Trade and Cooperation Agreement was no substitute for free trade or the EU agreement), reduced labour supply and greater uncertainty.
“With the crisis directly or indirectly impacting businesses across the country, they must try to properly and efficiently analyse the danger of specific scenarios. Businesses, particularly those that trade internationally or use suppliers that operate in overseas markets, may need to take further action to protect themselves from potential financial risks, especially those caused by increases in the GBP/USD or GBP/Euro exchange rates. This includes having a comprehensive view of their suppliers, customers and prospects to identify cash flow risks and to help business decision-making while also capitalising on new growth opportunities.”
Tommaso Aquilante, UK Lead Economist at Dun & Bradstreet