As the spectre of inflation and escalating energy bills looms large, mid-sized businesses across the UK find themselves navigating a treacherous economic landscape, with challenges such as securing financing and expanding operations looming large on the horizon.
According to a survey conducted by BDO, a leading accountancy firm, over half of the 500 leaders of mid-sized businesses cited “elevated” costs as their primary concern in the coming months. The struggle to access new capital for expansion initiatives compounded the issue, with 41% of respondents highlighting difficulties in sourcing financing from both private and public sources.
The looming shadow of the chancellor’s upcoming spring budget has prompted calls for reforms in various areas, including skills policy, tax streamlining, and improved access to capital. With 84% of businesses anticipating either a rise or a status quo in business tax levels until 2026, there is a growing sense of urgency for targeted interventions to bolster economic resilience.
Richard Austin, a partner at BDO, emphasized the critical juncture faced by mid-sized businesses, underscoring the need for clear and targeted policy interventions to support growth amidst challenging economic conditions. The mid-market segment, generating revenues exceeding £1 trillion and accounting for a quarter of all jobs, represents a vital engine for the UK’s economic recovery.
However, amidst these challenges, the hospitality sector is grappling with its own set of crises. According to data from Price Bailey, a staggering 514 restaurant businesses entered insolvency in the final quarter of the year, marking a new record surpassing previous figures set in 2023. The relentless onslaught of closures underscores the precarious state of the industry, with an average of 5.3 restaurants going bust each day in 2024, a significant increase from previous years.
Matt Howard, head of the insolvency and recovery team at Price Bailey, painted a grim picture of the hospitality sector’s future, warning that the sector’s woes are likely to exacerbate as the broader services sector faces mounting economic headwinds.
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Mid-sized Businesses Face Uphill Battle Amidst Soaring Costs and Economic Uncertainty