The business climate in the UK is the collective relationship between businesses, on the one hand, and government, financial institutions, labour unions, and employees on the other. Customers also play a role in this. Where they are optimistic, they engage with said businesses and spend their money. When they are not… The economy stutters.
Therefore, business t
hrives and expands when climate is positive. But stagnates when the environment is not conducive to growth. This is similar to plants in agriculture. Good rains bring forth good crops. Droughts cause them to fail. Astute companies adapt to the prevailing business climate. It is the difference between success and failure.
The Current State of the Business Climate in the UK
Business confidence is a response to business climate. It also feeds into it causing an upward or downward spiral. Governments attempt to manage this by manipulating interest rates, tax breaks, labour law, and so on. However, consumer confidence may override many of the benefits.
The business climate in the UK is uncertain, as the nation feels its way through the Brexit decision. There is a mixture of patriotism, optimism, and remorse in the air. Approximately half of Britain’s foreign trade is with Europe. Reconfirming these markets or replacing them will not happen overnight. U.S. and Chinese policies add another layer of uncertainty.
The UK Business Climate During Brexit
Nations import goods where they cannot produce them economically themselves. They export them where the converse applies. Britain is not in a position to ‘pick cherries’ in Europe. The mood is to keep trade within the Union. Britain may well be the loser, after Brexit, when it must compete on the open market.
The current state of the UK business climate is at best cautiously optimistic. Many companies are adopting a ‘wait and see’ approach. The climate is unlikely to return to pre-2008 levels until the government negotiates a positive European settlement. The result may take years to come through.