UK firms must plan now to avoid economic fallout

With the UK economy shrinking and inflation hitting a multi-decade high, UK businesses are facing unprecedented challenges over the next 12 months, the PrimeGlobal 2022 Business Leadership Forum heard.

Firms from across the UK, Ireland and EMEA region, attended the Forum, bringing together over 140 delegates from among PrimeGlobal's 308 member firms.

Julie Grimmer, Managing Partner at Larking Gowen, said, “This event has brought together likeminded firms and has produced some powerful thought leadership. It’s highlighted important challenges including economic fallout and talent acquisition, which face not just the accountancy sector but the business community as a whole.”

Speaking at the accountancy association's UK Forum, Alex Brandreth, Chief Investment Officer at Luna Investment Management, said, "It’s expected that UK interest rates will be around 2% towards the end of 2022/early 2023.”

"Another key point to consider when thinking about current high inflation levels, is that we’re comparing prices to a year ago, which was a largely inactive period because of restrictions being in place."

Commenting on the economic impacts, John Atkins, Partner at Larking Gowen, said, “The well-publicised cost of living crisis is affecting us all, whether it be our businesses, or personally. Inflation is currently running at around 9% with over 50% of this being driven by energy prices. With the UK being a net importer, and heavily reliant on several third parties, mitigation against this is very difficult in the short-term."

He felt some optimism, however, with economic rebounds to unprecedented one-off events historically happening within 12-18 months.

"The key unknown to the recovery time is how long the terrible events, currently ongoing in Ukraine, will continue, and what impact this will have on soaring energy prices.

"The economic uncertainty and supply chain issues are putting a huge strain on cashflow making it important now, more than ever, to plan for the future and get advice from a trusted source," he said.

PrimeGlobal is an international association representing independent accounting and business advisory firms, with 308 member firms in over 100 countries.

The conference, which was held at INNSIDE by Melia, in Manchester, from 7-9 June, covered key topics such as the benefits of a socially responsible business strategy, collaborative working, and technological insights.

Delegates heard how accountancy practices must develop their working methods and business focus to be able to face the challenges of a changing economic environment.