As the Bank of England warns of slow recovery for UK economy, Central bank forecasts output will not recover to pre-Covid-19 levels until end of 2021.
The Bank of England has amended its previous prediction that the UK economy would rebound swiftly from the recession caused by the coronavirus crisis, now saying GDP would not exceed pre-pandemic levels until the end of 2021. Here are a few thoughts from a selection of small and micro UK businesses in different sectors which may provide additional insights as to what’s happening — and reflect broader sentiment — on the ground.
Few are optimistic, most see unemployment rising sharply, many are seeing their prices come under sustained pressure, and almost all agree the worst is yet to come.
Tracy Bedwell, Managing Director of Lancashire-based Sales Training International: “The furlough scheme and various other government incentives have given us all a false sense of security and when they stop, unemployment will rise even more quickly. The Government is wasting money on schemes like Eat Out to Help Out and is neglecting small and micro limited companies that are vital to the economic recovery. We’re having to cut the prices of our services to remain competitive and are still at just 10% of our pre-Covid-19 turnover. There’s no doubt that the worst for the economy is yet to come.”
Lorna Carter-Blake, MD of Hampshire-based business training centre, DA Training and Consultancy: “I fear the Government is going to run out of money and the country will hit a deep recession. As furlough rules change, businesses are going to have to revisit how they operate and then make those difficult decisions around staff and redundancy. I am aware of businesses who have used furlough as an opportunity for staff to seek alternative employment because once furlough ends, they will be made redundant.”
Tracy Lynn, director of the Chester-based live events agency, Spark Creatives: “The Government’s approach has been bi-polar. A positive approach for so many businesses but a negative or non-existence approach for others. Prior to COVID-19 we lived in a country where entrepreneurs were celebrated and positively encouraged. Then a pandemic hits and the innovators, the ambitious and the brave company owners are crushed with the enormity of survival, both business and personal.”
Lee Marples, co-founder of the Derby-based creative agency, Think3: “The UK economy is in a state of shock and many businesses are having to take decisive action right now in order to survive. Levels of unemployment will almost certainly increase over the coming months as continued regional and local lockdown measures are implemented to minimise the spread of the virus and the financial pressures on businesses of all sizes take hold. Many business owners have two simple choices: reduce costs, which ultimately means a reduction in staff, or struggle to survive and risk going bust. Ironically, working from home more can often result in increased productivity, so will employers actually need the same volume of staff?”
Keisha Shah, founder of Milton Keynes-based educational learning business, Teddo Play: “Covid-19 has shaken the economy to its core and no country in the world was prepared for it. If a vaccine is not found and Covid-19 becomes a part of our daily lives then the damage to the economy will be even greater due to the huge amount of uncertainty and the fear of the unknown.”
Bethany Burrow Atherton, co-founder of London-based micro-brewer, The Beerblefish Brewing Company: “For the economy, the worst is yet to come, with the combination of COVID-19 and Brexit creating a double whammy of uncertainty. While online businesses may continue to do well as the COVID crisis continues, manufacturing industries and in-person service companies will struggle. The rich diversity offered by small independent breweries like ourselves is at risk of being lost in favour of mass-produced homogeneous beers from macro-producers. The new normal could be a new mass bland.”
Kerry Lummus of Lincoln-based KL Secretarial Services: “The economic outlook has never been more uncertain, with the strength of any recovery likely to be impacted by the extent to which the UK experiences a significant resurgence of Covid-19. Another unknown is the number of UK businesses that will fail once the support of government funding schemes is withdrawn, particularly in the retail and hospitality sectors. Finally, the risk of a disorderly Brexit looms over the horizon. Inevitably, the Government hasn’t been able to support every business but more could have been done to support new start-ups who had a lack of historical revenue. With so many established businesses failing, future government initiatives should focus on progressive businesses that are well-equipped to deal with the ‘new normal’, such as those that are virtually-capable, flexible and innovative.”
Sunita Nigam, director of the London-based expenses management software provider for UK SMEs, ExpenseOnDemand: “Our larger customers are putting real pressure on us to reduce prices and playing one supplier off against another. There has to be a mechanism to stop this.”
Amy Lainchbury, director of the London-based social media marketing agency, Tastycomms.co.uk: “Things like Eat Out to Help Out look good on the surface and have driven people to some restaurants temporarily, but that £500m could have been better spent on people who can’t afford to even eat in as a result of Covid. I think it’s complacent to the point of ridiculous to think we’re over the worst. I’ve already had a new, post-lockdown client slash their budget after only a month due to extreme nervousness about what’s to come, and I’m expecting more of that. There are mantras in the business world to know your worth and charge what you’re worth, but I’ve found that I’d rather have something than nothing, even if it means cutting prices.”
Chris Ramsbottom, director of the Coventry-based holistic therapy company, The Amethyst Centre: “The health and beauty industry has been comprehensively shafted by this Government. Why is it that people can go to a pub and mingle with God knows how many people, who may or may not be wearing masks, yet people who want to have facial treatments such as a massage or facial can’t? Bouncing back? Not a chance. Not when the Government says you can reopen and gives you 10 days notice, then the day before you are due to open says you can’t do the one thing your customers are queueing up for: facial treatments. If the Government hadn’t noticed, a football can’t bounce if it has no air inside it and my industry had all the air taken out of it last Friday.”
Tasha Vigille, founder of Devon-based candle-maker Cornucopia Emporium: “The worst for the economy is yet to come. I don’t know anyone who hasn’t been affected by the current economic crisis and the mental and social fear is real. As a small business owner, I am trying to branch out into as many different avenues as possible in order to survive the perfect storm that lies ahead.”
Sam Sutton, director of Beaulieu-based outdoor activities centre, New Forest Activities: “Arguably the Government has done too much too soon. It has created a culture of ‘sit around and wait’ rather than ‘drive hard and adapt’. Those who have slacked off will fail and still blame others for their failures. We’ll see this especially if there’s a second lockdown and the Government decides that they’ve run out of furlough money.”
Annie Spilsbury, director of Bristol-based cost reduction consultancy, Grasshopper Ant: “It’s survival of the fittest at the moment and the last four months has provided organisations with an opportunity to get ahead and adapt. Those that have not will find it very tough. The UK Government has delayed the inevitable at a huge cost to the economy.”
Angela Hall, owner of Peterborough-based online babygrow retailer, Zippyup.com: “The worst is still to come. Many businesses need passing trade and for customers to be out and about shopping, but people have changed their habits to avoid busy places. The Government has definitely helped support a lot of businesses during lockdown, but now many companies will have to reassess their situation and staff numbers in order to ride out the storm.”
Robert Walton, managing director of Suffolk-based contract interiors specialist, The Lindhurst Group: “The levels of support have been unprecedented and there will always be a “need for more” but the Government has abandoned new businesses that haven’t been trading long. They are the future of the economy and most owners will have sunk their savings into launching their businesses. Without any support or income they’ve been left to fend for themselves through no fault of their own.”
Amelia Ayerst, director of the Bristol-based online embroider, Undone Stitch: “I am worried that we are about to hit another wave of the coronavirus and that many small independent businesses will simply not survive another hit. It breaks my heart to already see some places shutting, I don’t want to see even more.”