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Business Review – September 2024 

Business confidence remains resilient 

Data from August’s Lloyds Bank Business Barometer showed business sentiment remains at an elevated level highlighting ‘continued positivity’ amongst businesses. 

The bank’s latest survey revealed a headline confidence reading of +50% in August. This was unchanged from the previous month, leaving business sentiment at the joint-highest level since November 2015 and significantly above the survey’s long-term average of +29%.  

The Barometer considers two confidence metrics – firms’ optimism for the wider economy and views of their own trading prospects – and both remained historically high in August. Economic optimism continued its upward trajectory of readings seen across 2024, with the net balance rising a further two-percentage points to +47%; the net balance for firms’ trading prospects meanwhile dipped slightly, but at +54% was still the second-highest figure recorded this year.  

Commenting on the findings, the commercial bank’s Senior Economist Hann-Ju Ho said, “As in July, we’ve seen a particularly strong outcome for business confidence. Official GDP data for the first half of this year was encouraging and the survey results indicate that solid economic performance will likely continue as we move into the second half of the year. Overall, the economy looks to be stable and from the positive results recorded, businesses are echoing this sentiment.” 

Digital trade deal good news for business 

The British Chambers of Commerce (BCC) has described the UK’s decision to join a global digital trade agreement as a ‘big win’ for business. 

After five years of negotiations, the UK and 90 other countries have now finalised the E-Commerce Joint Initiative at the World Trade Organisation (WTO). The agreement aims to make trade faster, cheaper, fairer and more secure and, once implemented, will commit all participants to the digitalisation of customs documents and processes. This will, in many cases, end the need to print forms off and hand them over at customs. 

The BCC were already expecting global trade to show good growth this year but noted that initiatives such as this would be needed to sustain growth in the future. It also called on the government to partner with business in order to implement the initiative and ensure British companies can reap the potential rewards by boosting levels of trade. 

In addition, the BCC encouraged the UK, along with other signatory countries, to step up efforts to get more WTO nations to sign the agreement. BCC Head of Trade Policy William Bain concluded, “Extending the benefits of digital trade globally is a win-win for developed and developing countries alike.”  

HMRC issues scam letter warning 

The UK tax authority recently warned small business owners to be vigilant after reports that fake letters were circulating, designed to trick recipients into divulging sensitive financial information. 

The letter, which uses a font closely resembling official HMRC correspondence as well as accurate technical jargon, asks the reader to verify their financial information by submitting documents including business bank statements and a driving licence or passport. While experts described the letter as convincing, a key indicator it was a scam was the email address; genuine HMRC emails end with ‘@hmrc.gov.uk,’ but the one referred to in the scam letter was ‘@hmrc-taxchecks.org.’  

Anyone receiving unexpected communication from HMRC is being encouraged to verify its authenticity by checking a list of genuine correspondence that the tax authority has recently distributed. This list can be found on the government website.  

An HMRC spokesperson added, “Tax scams come in many forms. Some offer a rebate, others tell you that your tax details are out of date or threaten immediate arrest for tax evasion. Never let yourself be rushed. If someone contacts you saying they’re HMRC, wanting you to urgently transfer money or give personal information, be on your guard.”  

Record number of company creations 

Figures recently published by data provider Beauhurst and NatWest showed that the UK saw a record number of new business incorporations during the first half of 2024. 

Data from the latest Startup Index revealed that 468,000 new firms launched across the first six months of this year, a 6% rise compared to the same period of 2023. On a regional basis, London saw the most start-ups with 161,000 new business incorporations in the first half of 2024, while both the West Midlands and Yorkshire, and the Humber also experienced notable growth rates across the same period. 

The survey also highlighted a significant uplift in the rate of new business formations in recent years, with the number of quarterly incorporations rising from 173,000 in Q1 2020 to 248,000 in Q1 2024; this represents a 43% increase. Overall, the research suggests there are now around 5.47 million active and dormant companies in the UK. 

Commenting on the findings, Beauhurst Managing Director Henry Whorwood said, “UK entrepreneurs are still starting lots of new businesses — the first two quarters of 2024 were record quarters. This may mark the beginning of a new normal with higher rates of entrepreneurship in the UK economy than known previously.” 

Small firms still struggling to recruit  

New research conducted by the BCC suggests attracting and retaining talent remains a key priority for small businesses as skills shortages continue to impact SME recruitment. 

The survey of 1,300 businesses found that more than six out of ten firms are currently experiencing skills shortages, with the problem found to be particularly acute in the manufacturing sector where almost three-quarters of respondents reported skills shortages.   

Advice from the BCC suggests businesses need to adapt their workplaces for the modern economy in order to attract and retain diverse talent fit for the future. However, the research also found that around two-thirds of small firms do not have specific recruitment, training or retention plans for specific groups of workers such as the under-25s, over-50s, disabled or neurodiverse people, or diverse ethnicities.  

The BCC is encouraging firms to provide greater support to employees in order to build a more resilient workforce. This could be through improving a range of non-pay benefits such as the provision of flexible working or health and wellbeing support in the workplace. By doing so, the BCC believes firms would set themselves apart in today’s competitive labour market and be better placed to attract and retain the best talent.   

Other News 

Take sleep seriously 

The theme for this year’s month-long Sleeptember campaign is ‘workplace sleep,’ with The Sleep Charity challenging businesses to take sleep more seriously. The campaign aims to raise awareness about the importance of sleep quality for workplace safety; promote healthy sleep habits, and highlight the consequences of sleep deprivation. Organisations are also being encouraged to sign up to The Sleep Charter, a declaration of support and a set of voluntary commitments to promote good sleep health among employees. 

Gen Z mid-career gap years 

Research undertaken by youth travel experts KILROY suggests Gen Zers are just as likely to take a gap year mid-career as they are pre-university. According to the survey of 1,000 Gen Z considering a gap year, almost a quarter of trips are being planned as a break from work, exactly the same proportion as being planned before starting university.  

Most sought-after languages 

Analysis of job advertisements by researchers at City Lit has revealed the most in-demand languages for UK professionals. Perhaps unsurprisingly, European languages were found to be in particularly high demand across multiple industry sectors, with German, French and Spanish taking the top three spots in that order. Interestingly, Turkish was the next most sought-after language, with Mandarin placed fifth on the list.  

Quirky Quote 

“We must never forget the importance of empathy and understanding” – Kamala Harris 

Hybrid working – is the future flexible? 

Research released by Speakers Corner has revealed a number of significant workplace trends and highlighted the growing importance of work-life balance and flexible working arrangements in today’s business landscape. Perhaps surprisingly, the data also suggests a relatively consistent level of opinion across the age groups. 

The findings were based on a poll of 500 UK business owners and directors of companies with at least 100 employees. Among the key findings were: 

  • 72% of business leaders agreed that a hybrid workstyle offers employees greater work-life balance 
  • 57% of 45-54s and 59% of 18-24s said they prioritise work-life balance and employee wellbeing 
  • 59% of female business leaders said they encourage work-life balance and employee wellbeing to boost productivity compared to 51% of their male counterparts. 

Commenting on the survey, Speakers Corner Managing Director Nick Gold said, “Whether we like it or not, it’s evident that hybrid work models are here to stay. What’s particularly interesting is that our survey findings highlight the consistency of opinion across different age groups of business owners and directors.”  

He continued, “Whether you’re looking at Gen-Z leaders in their early 20s or Gen-X leaders in their 50s, there’s a shared understanding of the importance of work-life balance. Ultimately, this generational alignment suggests that flexible working arrangements are becoming a universal expectation in the modern workplace, transcending age barriers.”  

The Big Stay 

A survey conducted by recruitment specialists Robert Walters suggests a growing number of UK professionals are reluctant to seek new career opportunities due to fears over job security. 

Specifically, the research found that 71% of professionals expressed hesitation at changing jobs, with concerns about stability at a new firm commonly cited as the main reason for this reluctance. In addition, 75% of respondents said they now consider job security as a key factor when evaluating opportunities, with 16% admitting that fear of insecurity in a new role had actually put them off applying for a position. 

Employers also seem to be aware of this growing phenomenon, with 74% saying candidates were increasingly raising the issue of job security during interviews. Robert Walters have dubbed this trend ‘The Big Stay’ and warned about its potential impact on both individuals’ career prospects and the wider economy. 

The company’s UK & Ireland CEO Chris Eldridge said, “Economic growth relies on labour mobility. Organisations need fresh perspectives to remain competitive, and employees who shy away from new opportunities risk stagnating in their careers. Statistically, those who change jobs more frequently tend to earn more over their working lives.” 

All details are correct at the time of writing (11 September 2024) 

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