Economic growth for the UK is seeming a distant prospect, and this week the governor of the Bank Mervyn King has hinted at further action to tackle the struggling UK economy. This is in light of the growth forecast being slashed to zero for the rest of the year – though only marginal growth was forecast before, no growth whatsoever is definitely a downgrade.
Influenced by ongoing problems in the Eurozone and the tighter lending conditions being imposed by the banks, the Bank of England’s quarterly report has cut growth forecasts from 1.25% initially predicted three months ago to predictions it will be 2013 before we see any growth – and it will be marginal at that.
Returning to pre-recession levels will take even longer as well. The Bank predicted it will be 2014 before activity returns to pre-2008 levels. However, King says the economy is healing slowly, with many of the conditions necessary for recovery already in place. He emphasised that getting the economy back on track would be a long and slow process.
New schemes such as Funding for Lending will take a while to show positive results. This is designed to encourage banks to lend at lower interest rates, helping to boost their business lending which has been inadequate for many SMEs and large businesses alike.
With all this bad news from the economy, it’s all the more important for small businesses to regulate their cash flow and stay on top of their invoicing procedures. If your business needs a bit of extra breathing room, invoice finance can help to free up cash tied up in unpaid invoices, helping you to combat late payment and make sure you can stay afloat. Businesses who respond positively to the economic climate will emerge from the tough times in a stronger position, poised for growth – and invoice finance can help your business achieve this.