It’s speculated by economists that another recession is imminent. Of course, predicting the economy isn’t always accurate, particularly following a rocky time with Brexit deals and uncertain outcomes. However, when comparing the period before the recession of 2008 (according to David Blanchflower, a former member of the Bank of England’s interest rate setting committee), the similarities are hard to deny. Although it is a daunting thought, business has survived before and will do again. So, no matter how big your business is, it’s important that you introduce strategies to keep your company safe.
Will we have another recession?
According to the UN, weak growth in both emerging and advanced economies is driving a future recession. Factors such as trade wars, currency fluctuations, and Brexit are all amounting to an uncertain global economy. According to the Unctad report, “global growth will fall from 3% in 2018 to 2.3% this year – its weakest since the 1.7% contraction in 2009”. Because of this global strain on economy, we are expected to encounter rising levels of debt (in both developing and advanced countries), as well as a “global downturn that could increase unemployment and inequality” (as stated by Kristalina Georgieva of the International Monetary Fund). Redundancies and a decline in job vacancies on an international basis are expected to follow such a crash, with unemployment rates increasing at an alarming rate.
How will that affect the UK?
If a recession happens, the UK’s economy will inevitably be damaged by the global landscape. The US trade war with China has caused a larger drag on global growth than anticipated, and the UK will be on the receiving end of the economic repercussions. What’s more, the looming prospect of Brexit poses different threats to the UK’s economy. At best, the uncertainty caused by Brexit has created a hesitant consumer base in the UK. Customers are spending less and are more cautious of businesses than ever. It is a difficult time to maintain customer loyalty, as would-be consumers are tightening their purses in the fear of a looming financial disaster.
A no-deal Brexit would’ve been likely to send the UK down a bleak future of recession. According to expert forecasts from Andrew Sentence and David Blanchflower, leaving the EU with no deal would’ve plunged the UK into its first recession in a decade. Boris Johnson’s new deal might negate this threat, but after the transition period (which will last the full year of 2020), the new deal might not be our saviour.
As mentioned before, it is difficult to predict the exact financial repercussions of our Brexit deal. Expert speculations have ranged from optimistic to dire, but it is important for business owners to prepare for the worst, nonetheless.
How can I protect my business?
Regardless, there are ways to prepare your business for an imminent recession. Businesses that prepare for every eventuality are the ones that survive and thrive in the face of adversity. Leaving it too late to implement a recession strategy could be your undoing, so get ahead of the game and prepare for a post-Brexit Britain. Here are some key strategies that will help your business face economic uncertainty:
