Investment is the backbone of business growth – and, as we all know, business growth is essential to rebuilding an economy that has, over the last few years, been brought to its knees.
Without enough investments, it is practically impossible to sustain the economy.
And with more and more businesses ended up in bankruptcy, without new outside investments, Great Britain is faced with serious problems.
This isn’t just the case in the UK – across the world, once-strong economies are grappling to regain a solid foothold in the global market.
Within the UK, however, investors are all the more wary, and business is beginning to suffer two-fold.
Here’s why the UK is struggling to keep pace with its peers – and why investors may not be standing in the wings, waiting for a moment to reinject cash into the private sector.
Brexit Bringing In Low Returns
Three years have passed since Britain made its official exit from the European Union and, so far, the promises made by the government have yet to be realized.
The country’s struggle in a post-Brexit landscape has been clear to many of us for some time now, but a recent report released by Bloomberg Economics shed new light on the extent of Brexit’s negative impact.
According to the report, the UK is losing an average of £100 billion in the form of lost investment opportunities, labour shortages, and other direct consequences of the vote to Leave.
Unfortunately, awareness is not a cure, and economists are predicting a difficult road ahead for the UK as it attempts to reignite interest from investors, and bring many businesses back up to their former glory.
Unfortunately, the country is not alone in that journey. Many across Europe are feeling the fallout of President Biden’s Inflation Reduction Act, which incentivized American-made products for American consumers – particularly in the car industry – and led to many international brands feeling slighted by the United States.
That, combined with the pressures of a green revolution in the face of Russia’s invasion of Ukraine – the subsequent cost-of-living crisis making everyday business dramatically more expensive – and the ‘unknown element’ that is the near-future, has led to a dramatic downturn in investment into UK businesses.
Is There A Simple Solution For Businesses?
Times of economic uncertainty or recession are often looked upon as times of extreme caution.
For individuals, they can be – but, for investors, they do represent opportunities for strong results, provided they can be prudent about who they invest into.
For that reason alone, now is not necessarily the time for businesses to go into ‘hibernate mode’ and wait for the winter to pass.
Investments are still being made – although, granted, the long-lasting impact of Brexit is causing some foreign investors to look elsewhere for opportunities.
Nevertheless, the wheels keep moving, and help is at-hand if you need it.
Remember that every business funding decision needs to be underpinned by expert legal help, to ensure the process doesn’t do more harm than good.
Corporate solicitors are important allies during these trying times, and can help you to navigate a complicated process to ensure that your business is funded in the right way – not just the only way that seems to be available.
Future Difficulties Are Expected
The UK will have serious difficulties in replacing things lost due to the decision to go through with Brexit.
It lost contact with the largest trading bloc of the world and made it quite difficult to attract new investors.
The truth is that the only new substantive deals signed after the EU exit were done with New Zealand and Australia.
The estimate of the government is that these are only going to increase GDP by a maximum of 0.03% and 0.01% respectively.
This is way less than it could have seen if signing deals with the EU.
The Budget Responsibility UK Office is responsible for producing official government economic forecasts.
It highlighted that Brexit, over the following 15 years, will reduce the UK’s output by an estimated 4% when compared to when it would have stayed in the EU trading bloc.
Imports and exports are both expected to be 15% lower during the same time frame.
Every single year, the UK is losing both imports and exports. And new overseas business investments are not coming in.
Fortunately, the government is trying to bring in several incentives for those interested in bringing money into the country.
For instance, many new visas were drafted for people who want to invest in many of the economic sectors suffering and for workers who could come in through them.