X

X

Let’s not kid ourselves: the real economy is a mess

The UK economy bounced back with aplomb in 2021, data released by the Office for National Statistics showed today.

With GDP coming in at 7.5% for 2021, the UK was the fastest growing kid on the G7 block. 

Admittedly, December was a dog (-0.2% growth) due to the Omicron variant wreaking havoc, but the consensus in the media, among the macroeconomists and spokespeople of big business, is that things aren’t that bad after all.

If only. The disconnect between what the millions of small and micro businesses are experiencing on the ground compared to what the experts in the ivory towers of the city are saying couldn’t be more pronounced.

Take Barry Whitehouse, owner at Banbury-based art shop, The Artery. A real business owner, not an economist earning a whacking big salary in a fancy office in the Wharf.

“Takings in December were around 15% down on the previous December but January and February to date have also been quiet. Footfall is visibly lacking in-store and in town, and to be honest, for the first time, I am worried for the future of my shop,” 

And listen to Jenny Blyth, owner of Storm In A Teacup Gifts, another micro business: “The day-to-day running of our small business is like wading through treacle and we are fighting a tide of bad news in the form of rising energy bills, inflation and taxes.”

In short, it’s messy out there. And it’s only going to get messier, with the dark clouds of inflation, rising interest rates and taxes, and soaring energy prices on the horizon.

A survey this week by Facebook group, Not On Amazon, which has nearly 190,000 micro businesses as members, found that 9 in 10 micro businesses say they are finding it harder to make ends meet than this time last year.

Its founder, Jamie Rackham, puts it this way: “This survey shows the grim reality independent businesses are facing today. The fact that nine in 10 micro businesses are finding it harder to get by than this time last year shows that the post-pandemic financial crisis is really only now starting to take hold.”

That kind of jars with the rosy picture of the economy being painted by Rishi et al.

And then there’s Brexit. Remember that? Brexit remains a huge concern for many small businesses, as highlighted by Jem Young, founder of No Forks Given Fabrications, a husband and wife team that turns old cutlery into art: 

“Brexit, and what it means, scares me. Businesswise, we have continued to deliver products around the world with no issues as yet but due to Brexit it's only a matter of time before we run into issues.”

If there’s anything to celebrate, it’s that the end of Covid restrictions may just, fingers and toes crossed, bring some stability back into business. Because stability and knowing what’s coming next is critical for the business community.

In the words of Adam Bamford, co-founder at Derby-based corporate gifting company, Colleague Box: “We are hoping that the end of the stop/start Covid dance that has been with us for two years will help us crack on with our day-to-day business and start to thrive. Consistency for a small business is key and that's been sorely lacking over the past two years.”

Whatever the macroeconomists and politicians say, the reality is that, for the average small business owner right now, it’s brutal out there.

And given that small businesses are the backbone of the UK economy, the ones in the trenches, it’s probably best to get your intel from them — rather than the General Melchetts staring at their maps in the square mile.


This Week’s Most Read

Latest IFA Magazine Podcast Episodes

Keep updated on the most important financial events 

Make sure you are an informed

wealth professional..

Adblock Blocker

We have detected that you are using

adblocking plugin in your browser. 

IFA Magazine