A latest Business Trends Report suggests that the post-Brexit slump is not as severe as originally anticipated, with British businesses starting to regain confidence.
Business optimism, which predicts growth six months ahead, is up to 98.7 from 97.9, having fallen to a three-year low last month. Business output, which reflects companies' current experience of orders, has fallen to 97.4 from 98.2. The factors suggest the Brexit vote instigated a short, sharp fall in business activity that firms are confident will quickly reverse. A further employment index, showing firms' intentions to hire, remains above the long-term trend at 100.9, while the inflation index sits at 101.4, suggesting that businesses expect inflation to rise over the coming months.
Despite this, credit ratings agency Standard & Poor (S&P) has said that the UK economy's rebound in the wake of Brexit is a "mirage", warning of a "cloudy" outlook for the country.
"The uncertainty surrounding the UK's future outside of the EU and the associated economic risks, which we think are pronounced and predominantly skewed to the downside, will gradually take its toll, particularly on investment, as businesses start dealing with the new Brexit reality", says Sophie Tahiri, economist at S&P Global Ratings.
Whilst we don’t yet know what lies ahead as a result of the vote to leave the EU, it is more important now than ever that business owners look at ways of improving profitability, working capital and cashflow, enabling their businesses to be more agile and flexible to respond positively to the changing economic landscape.
At Beavis Morgan, we work with a wide range of businesses of all sizes and across many different business sectors, helping them with strategic planning, system implementation, business turnaround and improving business performance for the future. Our diverse team of tax professionals are also committed to ensuring that your tax reporting obligations are fully satisfied and that every opportunity to lawfully exploit tax savings is made known to you, restructuring your affairs in a tax effective and efficient way.