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Keens City Round Up: Getting your business through the current fog

Well, here we are at the end of the party political conference season, and I’m certainly not any wiser as to the credentials of the various parties than I was before they started.

Nationalisation, increased spending and increased taxation seem to be back on the agenda for the Labour Party, (another version of Back to the Future 1997/2017), the Tories are struggling to divert attention away from Brexit without any headline statements from Boris, and the Liberals are still in the wilderness. The Bank of England has lowered its growth forecasts due to uncertainty of Brexit, and the media is hyping up their noddy interpretation of the economic situation, as usual.

Various surveys from economists and firms of accountants give differing messages over the potential impact of Brexit, but as far as I can see, the SME group, and certainly most of my clients, by and large, are getting on with business, but keeping a weather eye on the direction of travel of the Brexit noise. I don’t believe that this is actually a bad thing, as smaller businesses are much more mobile and flexible than larger organisations, and can change their strategies more readily than large companies. Trying to plan for an unknown outcome can be a major distraction on current business activities, if you guess wrong.

Fortunately for us, the UK economy is made up of a lot of SMEs, and I think there is an inbuilt paranoia (and with some justification as in the case of large service providers such as international banks) over the potential impact of the forthcoming changes. I can fully understand this in terms of some of the larger international corporates, but having been privileged to listen to a speech given by the French Ambassador to the UK at one of my client’s factories last week, the French government for one fully understands the need to maintain good trading relationships with the UK going forwards. For example, Car manufacturers export €14.6b to Europe and we import 44.7b. When you think that in the year 2017, there are estimated to be £100 billion of net exports to the UK from Europe, with the Germans, Swiss and French being the major exporters, it is difficult to believe that the politicians of these countries, as opposed to the EU bureaucracy, will be able to ignore the impact of an unfavourable trade deal on their countries under the Brexit negotiations.

So, for now, I think that we should leave the politicians to their various conundrums, whilst keeping a close eye on the individual corporate strategies of our businesses, and the reality of the economics of the marketplace.

In other words, let’s just keep calm and carry on.

By Paul Davis

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