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Economic threats your business needs to plan for

Economic threats your business needs to plan for
Thursday, September 15, 2022

The Bank of England is predicting that the UK will dip into recession at some point in 2022, driven by multiple factors that are causing the economy to stall and falter. But what are these key economic threats? And how are they likely to affect your business in the coming months?

The 5 big economic threats for UK businesses

The main economic issues that should be on your radar are external threats that, for the most part, are outside your direct control. But with an improved understanding of the problems, you’re better set to take action and reduce the impact.

Key issues in 2022 include:

  • High interest rates – The Bank of England has raised interest rates from 1.25% to 1.75%; the highest rate for 27 years. This increase may be good news for companies with surplus cash in a high-interest savings account. But it’s bad news for any businesses in need of funding. Higher rates make borrowing more difficult and increase the cost of repaying existing loans and finance facilities.
  • Rising inflation and high costs – UK inflation is currently at 9.4%, its highest rate for forty years. Rising inflation is bad for business in a number of ways. It pushes up prices for goods and raises your day-to-day overheads, making it harder than ever to make your working capital and cashflow stretch far enough.
  • The supply chain crisis – keeping supply chains running has been extremely difficult during the Covid pandemic. When you add in other geo-political problems, like the Ukraine war and the rising problems of climate change, it’s easy to see how significant the global supply chain crisis has become. When supply is scarce, this pushes up demand, raising the price of raw materials and goods and slowing down the supply chain to a point where businesses can't operate effectively.
  • Post-Brexit fallout – the outcome of leaving the European Union (EU) has proved to be difficult for many UK businesses. The additional red tape, long wait times for shipping and freight and additional customs & excise costs have made it impossible for some sectors to trade at full capacity.
  • UK recession – these external factors are gradually forcing the UK into an economic corner, with the Bank of England predicting that the UK will fall into recession in 2022, leaving businesses with the prospect of a prolonged period of economic instability – probably not what you hoped for when you sat down to write your 2022 business plan!

Getting your business recession-ready

The outlook for 2022 and beyond into 2023 is less than rosy. But there’s also no need to despair. There are challenges ahead, but there are also ways to bolster your finances, plan for different scenarios and get your business ready for the impacts of a UK-wide slowdown.

If you’re worried about the potential impact of a UK recession, please come and chat with us. We can run you through the latest economic forecasts and help you do everything possible to reduce the effects of an economic downturn.

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We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

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The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

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I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle | Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

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I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison | Wallingford Builders
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Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

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Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey | Bluestones Garden Design
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Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller | Bigger, Brighter, Bolder BBB

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