What a (another) crazy week! The British are suffering from Post Traumatic Brexit Syndrome and now there is a new PM at Downing Street. And Boris is the Foreign Secretary!
Leadership and stabilising the economy
In all the turmoil, it is vital to stabilize the economy - business needs assurance that there is a strong, positive and capable leader at the helm. Most urgent is the need to smooth the waters for the SMEs - the future growth of the country - who are particularly vulnerable to massive currency variations.
Commenting on the announcement that Theresa May will be the new Prime Minister as of Wednesday 13 July, Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said:“With Theresa May now confirmed as the next UK Prime Minster, the Government must act decisively to secure our long-term economic stability after the decision to leave the EU. Immediate action is needed to improve small business confidence and allow them to reliably plan ahead for the future.
“The new Prime Minister will decide the UK's approach to EU negotiations, and she must ensure that smaller firms' interests are taken into account - simple access to the single market, the ability to hire the right people, continued EU funding for key schemes and clarity on the future regulatory framework.
He urged the Government to get it's business focus back, and now we have an official Leader, to deal with the urgent issues that have taken a back seat as a result of the political situation. These include airport expansion, HS2, energy security and the Northern Powerhouse, delivering on business rates and changing plans for quarterly tax returns.
And speaking of interest rates – the Bank of England’s monetary policy committee (MPC) voted 8-1 to keep interest rates unchanged at their record low of 0.5%. The reason given is that rate setters want to wait and see how the economy performs over the “coming weeks as the fog of the recent Brexit vote turmoil began to clear,” says Philip Inman in The Guardian.
Another reason for caution is fears over inflation: by increasing the money supply, Banks would increase prices or inflation. The GBP has fallen significantly against other currencies, which will make imports costlier, and the cost of living higher. There are many uncertain factors which may impact the average business.
How does this impact my business savings?
And what about savings accounts, particularly for businesses?
Savings accounts have not exactly enjoyed fabulous interest rates for ages. Ben Chu of The Independent, said that a rate cute “may be passed on to savers, meaning further pain. But with interest rates already so low banks may hesitate to pass the cut to savers and choose to absorb the hit themselves.”
Looking forward to the future
Our view at StrongJones is that the country needs is good strong leadership, optimism and confidence. As Stephen Kelly, CEO of Sage Group PLC, said in a recent article, “Whilst big businesses talk about shifting operations, and the media speculates about the FTSE 100 companies, my barber in Richmond, and your baker in Shropshire carry on, driving growth and creating jobs & prosperity for UK. Let’s remember that going back as far as the silk traders, commerce has always triumphed so it is our responsibility to promote ‘business as usual’.”
We believe that in Britain we are a nation built on solid foundations, and we need to doggedly continue to trade, support small business and function as we did before.
With our new StrongJones start-up , we foresee that SME's hard-earned cash will be earning the maximum interest possible - even in times of extreme political and monetary policy change. We are here to help SMEs maximise returns in their business, using the typical under-utilised cash savings. We aim to provide a range of cash management tools, an area traditionally neglected by larger banks, adding significant value – saving time, providing peace of mind – and earning money. This frees up resources to be reinvested in the business operations and team.
Speak to us about joining our Beta user group – obtain your personal feedback, setting up a unique profile, and ensuring we provide value for the daily pragmatic life of your business.
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Theresa May, new British PM, takes over at Number 10 this week. Photo: PA, from BBC.co.uk