UK GDP: "The UK has hit an unexpected speed bump as the economic engine sputters"

I work with SME manufacturers and my clients are feeling pretty optimistic. Order books are full and exports are up for those that have broadened their horizons beyond the EU. The main concern is a lack of skills that prevent them from expanding as fast as they'd like although the proposed legislation to give new workers equal rights from day one will definitely put the brakes on hiring new employees, which will also slow growth.

All eyes in the economy are very much on the forthcoming Budget. Visibility, or rather the lack of it, is currently a major challenge for many SMEs throughout the supply chain, with some reluctant to press ahead with plans until there is clarity after the Autumn Budget. Businesses will be nervously waiting to hear whether Labour announce further tax hikes or increased borrowing, which, if true, will only add to inflationary pressures and undermine business confidence. I truly hope Labour can deliver a Budget that both revitalises the economy and reassures sceptics like me. I fear that may be too much to ask, and that we'll just be left with even more uncertainty.

Although trading through Summer has been steady for most businesses we work with, they are now really feeling the cashflow pinch with the new 25% corporation tax rate payments falling due for many. Many of our clients are very cautious about the upcoming Labour Budget. They are accelerating transactions where possible to avoid rumoured IHT and Capital Gains changes, and delaying hiring decisions until more information is given on the proposed changes to employment rights.

The real story is the ongoing disconnect between headlines and daily reality. Many businesses spent the summer navigating a perfect storm of rising costs and flat demand. Any optimism to be had from recent interest rate reductions and the potential for profit gains as a result, has been mostly drowned out by fears over Labour's proposed tax policies. Heading into the Autumn Budget, it feels largely like more choppy waters are ahead. Politicians talk of recovery, but for businesses, it feels like we're still drifting. Small businesses are the backbone of the UK but many business owners are living in fear and uncertainty over their ongoing viability with a political agenda that appears to have middle England in its sights.

In times of economic uncertainty, businesses and charities need to focus on resilience, not just short-term gains. While GDP figures give us a snapshot, it's the everyday cash flow and confidence in future planning that really tell the story. This summer, businesses have been grappling with rising costs, and charities are stretched thin as donations dry up. With the Autumn Budget on the horizon, there’s concern that tax changes will heap more burdens on already strained shoulders. We're advising clients to prepare for volatility but also to seize opportunities for long-term growth. We see many SSAS trustees using their pension funds not only to invest in their own businesses but to acquire others. It’s a bold move that can boost cash flow, and ultimately strengthen their position in a tighter economy. In spite of proposed tax changes, balancing short-term pressures with strategic acquisitions helps businesses build resilience and secure their future and their pensions.

As a mortgage broker operating primarily in the specialist sector, July and August are typically quieter months for us. However, as we move into September, there’s been a renewed sense of confidence in the market, helped by recent rate decreases and SWAP rates reaching their lowest levels since 2023. With the Budget around the corner, many people will feel a natural sense of concern about what’s to come. Personally, I hope that whatever news is revealed, the UK will continue on its natural course, embracing the 'keep calm and carry on' mentality that has seen us through challenging times before.

As we head into autumn, my career coaching business is moving at a steady pace. September to December is traditionally busy as people reflect on their careers post-summer break and I'm confident that the last quarter of 2024 will be no exception. I am continuing to see a fairly balanced mix of clients: some making strategic career changes, others reacting to redundancy news. But what's notable this year is the shift in demand. Previously, I was mostly helping with CV and LinkedIn optimisation. Now, more clients are seeking full career transition support—right through from personal brand work to interview practice. My thoughts are that this ties in with the growing social media, news stories, and ONS reports about the tough job market, which is causing people to seek guidance to gain an advantage at every stage of the job search process.

No growth Britain could put Britain into recession very quickly. Is this enough for a September rate cut? Unlikely, but it adds weight to further rate cuts before the year is out.