Although having a slow and worrying start to the year, as schools reopened and the vaccine was rolled out – trading activity and retail spending began to pick up. The UK economy shrank by 1.5% between January and March, but grew by 2.1% in March – a huge leap in the right direction. 

 

And although the economy is still 8.7% smaller than before the COVID-19 pandemic, with restrictions easing further in June, we look set to be on course for a profitable month. 

 

So, we can safely say that the economy is heading in the right direction and businesses should feel confident. If March was a sign of things to come, then June should add promise to Chancellor Sunak’s prediction that we are definitely “getting back on track.” 

 

But as accountants, we feel we should be prudent about the rate of recovery! Perhaps some factors to take into consideration are these. 

 

Although we all paid a huge cost to our lives during lockdown, we as people adapted well to restrictions. And so, spending may be restrained – not just from a budgeting point of view, but because the majority of us have embraced a simpler and less extravagant lifestyle. Could this affect the predicted upturn in economy growth? 

 

And let’s not forget Brexit. With new trading rules and a decline in trading with EU countries last quarter, could this also have a knock-on effect? 

 

With this in mind we would refrain from believing the media hype about the fastest growth in over 70 years, and side with Andrew Bailey, the Governor of the Bank of England…we predict more of a bounce back than a ‘boom’. 

 

The most important thing you can have as a business owner in 2021 is a robust business strategy. 

 

“Put simply, having a good business strategy in place helps set out your long-term objectives and shows how your business needs to be structured, funded and monitored to help you reach those goals. This includes any remedial action to get the business back on course, such as financial budgets and forecasts. Always get help from an experienced accountant who specialises in that area. Whether you’re a start-up or an established company, we know exactly what needs to be included in your business plan and have the skills to help you reach all of your goals for 2021 and beyond.”