The headlines today are about the economy being in recession for the first time in 11 years. The UK suffered its biggest slump on record between April and June as coronavirus lockdown measures pushed the country officially into recession. The economy shrank 20.4% compared with the first three months of the year.
This is not really a surprise to anyone as household spending dived as shops were ordered to close, while factory and construction output also fell.
However… there is some good news – The Office for National Statistics (ONS) said the economy bounced back in June as government restrictions on movement started to ease. On a month-on-month basis, the economy grew by 8.7% in June, after growth of 1.8% in May.
We do expect growth to continue although some sectors of the economy will not recover as fast as others. It will take time for the retail and hospitality sectors to get anywhere near where they were in March. The Eat Out to Help Out scheme should help.
Planning is essential in a recession…
For all of us in business now is the time to be flexible and resilient with planning forward. Some of our clients have already repurposed their businesses and pivoted into new areas. These businesses are now seeing signs of recovery and what is clear to us is the need to take time to think about new ways of doing business.
At a time like this cashflow forecasting is essential. It is important not to bury your head but to ask the hard questions… Do you know how long your cash will last? Is your current cash position keeping you up at night? Do you have detailed cashflows or are you just winging it and hoping for the best?
Please talk to us about our planning resources to help you think about your future. We are here to support you! Give us a call or drop us an e-mail we would love to grab a coffee and chat over zoom!