Tag Archives: Economy

Accountancy & Accounts, Business, Business Finance, Research

Confidence among UK accountants rises despite tough trading conditions

Following a historic low of confidence in Q4 2024, Q1 2025 shows an uptick amongst UK accountants, although still well below normal confidence levels

Confidence among UK accountants rose marginally in Q1 2025, after falling to the lowest ever level in Q4 2024, according to the Q1 2025 Global Economic Conditions Survey (GECS). The survey from ACCA (the Association of Chartered Certified Accountants) and IMA® (Institute of Management Accountants) suggests that confidence amongst British SMEs has materially improved in Q1, but across the board there was a mixed set of results.

 

There was a second consecutive increase in the New Orders Index, though it remains below its historical average, but not significantly. While the Employment Index registered a decent improvement, the Capital Expenditure Index declined modestly – both are at very low levels historically.

 

Concerns about suppliers and customers going out of business declined this quarter, however there were significant concerns evident in some key measures. There was a meaningful rise in the proportion of respondents reporting increased operating costs – it is now at its highest since Q1 2023. Problems securing prompt payment and problems accessing finance indices both rose for the second consecutive quarter, which could negatively impact business cashflow and financial viability.

 

Jonathan Ashworth, chief economist, ACCA, said: “Global growth has generally proved quite resilient over recent quarters. Nonetheless, the longer that confidence remains depressed, the greater the risk that a self-reinforcing negative cycle could potentially develop, with firms pulling back on orders, capital expenditure and hiring. Unfortunately, with global trade tensions stepping

 

 

up markedly since the survey was completed, the downside risks to the global economy have increased significantly.”

 

Glenn Collins, head of technical and strategic engagement, ACCA UK, added: “With business confidence so low and all the talk of government strategies, now is the time for action. The lack of final published strategies has a negative impact on businesses, who look to those plans to prioritise investment and grow. While the global market flux provides a challenging environment, it also provides opportunities for business to expand into new markets and a lack of positive forward momentum is holding us back.”

 

Alain Mulder, senior director, Europe Operations & Global Special Projects at IMA, said: “New US policies on trade and government spending, and the uncertainty surrounding them, appear to have had a large negative impact on confidence, while declines in the global markets and signs of slowing in the US economy were likely factors too.”

 

Read the report here

Accountancy & Accounts, Business, Business Finance, Economy & Jobs News, Pensions, Wales

Pension funds should sit tight amid US Tariff chaos, says Quantum Advisory

Quantum Advisory, the leading independent pension and employee benefits consultancy, today urged pension funds to remain calm and avoid making hasty decisions in response to the recent US tariff crisis.

On Wednesday 2 April the US unveiled the imposition of ‘reciprocal tariffs’ on trading nations, set at levels far higher than anticipated. This announcement triggered significant declines in global equity valuations. While equities have since somewhat bounded back, bond yields have also spiked and commodity prices have fallen, including gold—traditionally seen as a safe haven.

Paul Francis, Principal Investment Consultant at Quantum Advisory, added: “Following the announcement of the tariffs, global markets took a significant hit. The sharp and rapid decline signals a substantial shift towards a new economic order. While this downturn is likely solely attributable to the tariffs, some analysts argue that the decline began earlier this year, triggered by DeepSeek’s open-source AI model.  Perhaps that was only the embryonic phase of what now appears a full-on trade war between the two superpowers.

“Regardless, we now face the consequences, and schemes need to consider their options, particularly with regards to equity market diversification and positioning.  The equity relief rally seen last night followed the US pausing the punishing rates of ‘reciprocal tariffs’ it imposed on countries other than China.  It comes as a welcome development for many.  But fear of what comes next remains.

“Higher tariffs erode international competitiveness, which in turn reduces global trade. This leads to job losses, rising prices, and a slowdown in economic growth. Here in the UK, the new tariffs have already wiped out the modest fiscal headroom projected in the Spring Statement. As a result, the Chancellor may be forced to break fiscal rules, potentially leading to higher taxes and/or spending cuts.

“It’s going to take a while for the global market to adapt and, as with all things investment, things could still change – both positively or indeed negatively – and quickly.  Volatility of returns is high, which isn’t necessarily bad, as it presents opportunities for profit. However, being on the wrong side of a trade can be costly. Making drastic changes to investment strategies based on recent developments would be a bold move. Now is not the time for major shifts. Uncertainty affects all asset classes, and there’s no clear safe haven. Bond prices may fall further, and moving to cash could lock in losses and miss potential gains in equities. For those considering asset class transitions, proceed with caution. The risk of being out of the market is significant, especially with markets moving 5% in a single session. Pension funds should lean heavily on their advisors in this time.”

Business, Business Finance, Economy & Jobs News, FInance, Wales

Labour costs loom ahead of new financial year

Businesses feel under pressure to raise their prices due to labour costs, according to Chambers Wales South East, South West and Mid’s first Quarterly Economic Survey of the year.

 

85% of businesses in Wales stated that labour costs, including salaries, pay settlements and contractors, were a key business pressure in the first quarter of the year, with the concern rising from 81% in Q4 of 2024.

 

Increases to the National Minimum Wage (NMW) and Employer National Insurance Contributions (NICs) from 1 April and 6 April respectively are also factoring into businesses’ plans to raise prices of their goods or services by up to 15% to cover costs. 44% of Welsh businesses surveyed shared that they plan to raise prices because of both NMW and NICs, while 10% suggest that they will increase prices because of the National Insurance increase only.

 

More than three quarters of businesses in Wales (76%) revealed that the size of their workforce remained constant in the last three months, with the number attempting to recruit in Q1 falling to 40%, compared to 45% in the previous quarter. More than half of Welsh businesses (58%) expect the size of their workforce to remain constant in the next quarter, while 23% plan to increase their workforce.

 

The Quarterly Economic Survey for Q1 also showcased the successes and confidence of businesses as they began the new calendar year, with 39% experiencing an increase in export sales and bookings, 28% increasing investment plans for plant, machinery, technology and equipment, and 45% predicting that turnover will improve.

 

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said: “In our recent Quarterly Economic Surveys, including this survey for Q1, recurring concerns for businesses centre around labour costs and taxation. As changes are set to come into effect in April, businesses in Wales are having to review their goods and services prices, ongoing costs and recruitment plans.

 

“While there have been glimmers of optimism in exporting and some aspects of investment this quarter, firms will require reassurance and action from government to avoid stagnating and unlock growth. The Office of Budget Responsibility’s revised growth forecasts suggest that economic growth is less certain this year but will be a longer-term achievement.”

Business, Economy & Jobs News, UK, USA, Wales

Tariffs announced by US

David Peña, Director of International Trade at Chambers Wales South East, South West and Mid, said:

“Tariffs and other trade barriers have historically shown their inefficacy when it comes to fostering long-term economic growth and competitiveness of products and businesses.

“Increased levels of uncertainty paired with slow economic growth paint a grim picture for Welsh businesses, all while inflationary pressures are still present. The effect of increased global tariffs will be impacting all sectors: from exporters seeing their products becoming less competitive overseas, to importers seeing their supply chains impacted, to final consumers on all receiving ends.

“We expect our politicians to keep dialogue channels open and arrive to satisfactory agreements. Tariffs and trade barriers that are raised can also be taken down.

“Chambers Wales South East, South West and Mid stands ready to support businesses in Wales through market turbulences and will always work with partners and stakeholders to find alternative and innovative ways to keep trade flowing. We stand for trade, commerce and economic growth.”

Business, Business Advice, Business Finance, Economy & Jobs News, Politics, South Wales

Chambers Wales South East, South West and Mid comments on Spring Statement 2025

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“As expected, there was not much in terms of new announcements in the Chancellor’s Spring Statement today. The OBR forecasts highlight economic concerns already familiar to most businesses in Wales. Inflation concerns have not yet disappeared and there are worries about business and consumer confidence.

“Infrastructure and housing falls within the remit of the Welsh Government and like the rest of the UK, Welsh businesses support the prioritisation of simplifying the planning system but are keen to see the proof of this with spades in the ground. The industrial strategy and increased defence spending we hope will have a positive impact in Wales where the manufacturing and defence industries have a significant presence. Infrastructure investments are proven to boost economic investment, and channelling more spending out of the civil service and directly into infrastructure and increasing the amount of funding available to Wales is also welcome, providing the right projects are chosen.

“It is difficult to see any significant improvement in confidence and investment driving economic growth without capital investment led by the government. The government remains bound by fiscal rules that I would argue ignore the economic impact of borrowing to fund capital investments. Part of the problem has been the lack of any robust return on investment analysis on government spending.

“Consumer confidence remains hamstrung by a two-tier economy. The success of healthcare, welfare, and employment reforms will hang on whether they manage to improve overall employment and wage growth; this will be a big test over the next 12 months. The government has been clear that this is how it expects to be judged in the long term.

“Business owners are facing significant headwinds, the full impact of which we are yet to see. The economy could break out of these headwinds but the government will need to lead the way – just cutting spending will not change much, reform needs to achieve change.

“Global trade remains the government’s other major challenge. At the moment the government is trying to balance its relationship with the US and EU and whether events will force them off the fence one way or another remains to be seen. With domestic demand static, growth may be dependent on how the global trade environment now evolves.”

Accountancy & Accounts, Business, Business Finance, Economy & Jobs News, Finance and Banking

ACCA Cymru/Wales comments on the Spring Statement 2025

Lloyd Powell, head of ACCA Cymru/Wales, said:

 

“ACCA’s data from SME financial professionals highlighted plummeting business confidence in recent months, largely driven by increasing costs. Today’s statement didn’t contain any additional measures that will impact upon business, but this year’s lower growth forecast, cost increases and the knock-on impact on inflation will do little to boost confidence and investment.”

Business, Transport

Cardiff Capital Region begins public consultation on shaping transport provision in South East Wales

Consultation on the draft Regional Transport Plan (RTP) is open until 19th May, aimed at unlocking opportunities, connecting people and businesses and supporting the creation of jobs in the Region.

Cardiff Capital Region (CCR), the regional body made up of the ten Local Authorities in South East Wales, is consulting with the public and wider stakeholders on its draft Regional Transport Plan (RTP). From Monmouthshire to Bridgend, the Valleys to the coast, residents and visitors across CCR are invited to review the Plan, and its vision, objectives and policies.

CCR’s goal is to build a Competitive, Connected, and Resilient Region: the vision for the RTP is to establish an efficient, affordable, low-carbon transport network that enhances quality of life, fosters shared prosperity, and supports a carbon-neutral Region where walking and cycling are favoured for shorter journeys and includes decarbonisation of the transport network.

Now, the public is invited to have its say in consultation by visiting: https://regionaltransportplanccr.wales/.  Responses from the public will help shape the future of transport in the Region.

The consultation asks residents, businesses, and stakeholders to share their views through an online survey, webinar and a series of ‘pop-up’ events across the Region.

Cllr Andrew Morgan OBE, Chair of CCR’s Regional Transport Sub-Committee and the Leader of Rhondda Cynon Taf County Borough Council, said:

“CCR has already invested millions in Metro improvements and led the way on low-emission transport.

“But transport isn’t just about getting from A to B, it’s about unlocking opportunities, connecting businesses, creating jobs, and making our communities stronger and fairer.

“Our Regional Transport Plan will help us deliver a greener, smarter, and more inclusive transport network that supports economic growth and tackles climate challenge. We need to hear from those who use, or want to use, regional transport, so we encourage people to join in the conversation”.

Accountancy & Accounts, Business, FInance, Finance and Banking, Finance News

Inflation rises to 3%

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“Today’s announcement that inflation has risen to 3%, its highest level in 10 months, will not be the news businesses were hoping for, but is in line with my view that some inflation projections are overly optimistic.

“The rate, combined with wage inflation figures, highlights the inflationary pressures in the economy and the challenges facing businesses. Although we expect interest rates to come down, there is not a clear path as to how quickly they will reduce and businesses should be cautious about relying on optimistic forecasts.

“While over a third (36%) of businesses in Wales cited inflation as a concern in our Quarterly Economic Survey for Q4 2024, 78% were concerned by taxation. Within the next few months, businesses will be facing rises in employer national insurance contributions and the National Minimum Wage, significant labour costs which could fuel inflation to rise further.

“Businesses will be following upcoming announcements and fiscal events with the hope that cost pressures can be eased, enabling them to plan, invest, recruit and trade with more confidence.”

Business, Economy & Jobs News

Chamber reacts to Chancellor discussions

David Peña, International Trade Manager at Chambers Wales South East, South West and Mid, said:

“The EU continues to be a vital market for Welsh exporters, accounting for a substantial proportion of our international trade. From agriculture and food production to advanced manufacturing and life sciences, Welsh businesses are well-positioned to capitalise on the opportunities presented by the bloc’s diverse markets. The recent discussions between Chancellor Rachel Reeves and European finance ministers, particularly around removing barriers for farm and food exports, mark a positive step forward in improving trade conditions and fostering growth.

“At Chambers Wales, we recognise the challenges businesses face when trading with the EU, particularly in light of changing regulatory landscapes. That is why we are actively collaborating with an EU counterpart to provide practical support and unlock new trading opportunities. This partnership is designed to address critical needs such as compliance, market access, and streamlined trade processes, helping businesses maximise their potential in European markets.

“In addition, we are launching a series of targeted webinars in January to help businesses stay ahead of regulatory changes, with a particular focus on key compliance topics such as the new General Product Safety Regulations (GPSR). These sessions will offer valuable insights and guidance, ensuring Welsh exporters are equipped to meet EU requirements and maintain their competitive edge.

“Our goal is to empower Welsh businesses to not only overcome existing barriers but also to thrive in the EU marketplace. With the right support, we believe Welsh exporters can continue to drive economic growth and build stronger international trade relationships.”

Accountancy & Accounts, FInance, Finance and Banking, Wales

ACCA Cymru/Wales on the draft Welsh budget

Lloyd Powell, head of ACCA Cymru/Wales, in response to the draft Welsh budget said:

“Following on from the extra spending on public services announced in the UK Budget in October, the draft Welsh Budget saw additional £1.5 billion of spending announced on public services, including the NHS and local authorities. Spending announcements in the draft Budget were firmly in line with the four priorities outlined by the First Minister earlier this year.

 

NHS

 

“Recognising the significant challenges the NHS in Wales faces, with an ageing population, increasing demand, persistent health inequalities and skills shortages, the 2025/26 draft Welsh Government budget saw a further £600 million allocated to Health and Social Care in Wales – amounting to over 50% of the total Government Budget. This needs to be accompanied by service reform and productivity gains. WG needs to redouble its efforts to address the fundamental challenges as outlined in ‘A Healthier Wales’ in 2022, including reducing waiting times, increased use of technology and investing in the workforce for the future.

 

Business support/skills

 

“Businesses in Wales continue to face challenges in 2025 and into 2026 which have adversely affected business confidence. These include higher employer National Insurance contributions and other rising costs such as the National Minimum Wage.

 

“The commitment to continue to support skills provision is welcome. The importance of supporting people into high-quality jobs, which are designed to drive economic growth and tackle poverty cannot be overstated. The additional investment of £6.5m resource funding to support the Flexible Skills programme, particularly in those sectors associated with decarbonisation, is a positive announcement.

 

“The announcement to extend non-domestic rates relief for businesses in the retail, leisure and hospitality sectors at the current 40% will help Welsh businesses in these sectors, although there will be concern at what support will be available beyond 2025/26.

 

“The announcement on accelerating planning decisions to grow the Welsh economy will be welcomed by many Welsh businesses looking to expand, as will announcements to improve the transport system in Wales. Businesses will hope that improvements in these areas will be delivered at pace to support the growth of the economy across all of Wales. .

 

Climate Change

 

“The additional funding to support climate change is welcomed as Wales continues to transition to low carbon industries and developing renewable sources of energy which also provide high skill jobs for Wales.

 

General

 

“The draft Budget only outlines spending plans for one year. Multi-year settlements for resource and capital at the conclusion of the UK Spending Review in 2025 will provide much needed certainty for the Welsh Government and its partners.

 

“The draft Budget needs the support of at least one opposition party, and it will be interesting to see how the discussion and debate on the draft budget develops in the new year prior to the Budget’s final approval in February 2025.

 

“Welsh Government needs to work with all partners, including businesses and the UK Government, to ensure the successful delivery of programmes of work that benefit the Welsh economy and society.”