Small businesses can provide the growth Labour needs but Rachel Reeves must create a pro-business environment
13 December 2024, 15:54
The UK’s GDP contracting by 0.1% wasn’t the news anyone wanted.
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A small decline, yes, but forecasts had pointed to modest growth of 0.1%, so this turn of events is disappointing.
Beneath the headline figure, you can see a worrying decline in construction (-0.4%) and production (-0.6%), while the dominant services sector stagnated (0%).
This mirrors our own latest research with small businesses across the country, which showed confidence still down after several years of economic stagnation.
However, if we’re looking for hope, small businesses are nimble and have the potential to grow, with the right business environment in place. Our research found 51% of small firms plan to grow in the next 12 months.
Today’s GDP figures show a 1.2% drop in accommodation and food services and a 0.3% drop in retail.
Hopefully, the festive season will give some respite to these sectors, and as people head out for Christmas shopping or to book a Christmas party, it will be more beneficial for local economies for savvy customers to look at the great products and services on offer from smaller businesses – whether on the high street or online.
However, while December offers some opportunities for recovery in some sectors, this is seasonal, and small businesses of all kinds need support and a pro-business environment to weather the challenges they face year-round.
The Government’s upcoming Industrial Strategy and trade plans must deliver real investment and opportunity. Small businesses need a pathway to recovery to help the UK economy regain its footing and move towards sustainable growth. With the right support, these businesses can be the drivers of a stronger, more resilient future.
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