UK General Election 2024: Political Uncertainty Is The Top Concern for UK SMEs

As the landscape for small and medium-sized enterprises (SMEs) in the UK continues to evolve, political uncertainty has emerged as a top concern for business owners, according to recent research conducted by Shawbrook.

The findings reveal a notable shift in priorities compared to the previous year, underscoring the impact of political dynamics on the SME sector.

Highlights of the research include:

  • Political uncertainty is the top concern for the majority of SMEs as the UK gears up for a general election
  • Over half of SME decision-makers have cited the potential change of government and political uncertainty as key concerns.
  • Rising costs remain a major worry, with 73% of SME decision-makers citing this as a concern- up from 68% last year.

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The findings showed a staggering 51% expressed apprehension over the potential change of government. This sentiment was closely echoed by 50% of respondents who cited political uncertainty as a major concern, highlighting the ongoing unease within the business community as the UK heads towards a general election.

While rising costs have long been a predominant worry for SMEs, the survey indicates this has been exacerbated in the last year. Three quarters (73%) of respondents cited rising costs as a top issue, up from 68% in the previous survey last year, with a notable 26% saying they were very concerned about the cost of running their business. This uptick reflects the mounting pressure faced by SMEs amidst ongoing economic volatility.

Read more: 3 Tips for SMEs to Win Government Contracts

The cost of living remains a pressing concern for business owners, with 69% saying they were concerned looking ahead to the next 12 months. Similarly, economic uncertainty continues to be a worry for 66% of respondents, although this was a decrease from 69% from the previous year’s figures.

Interest rates and supply chain disruptions also feature prominently among SMEs’ apprehensions, with 67% and 57% respectively expressing concern. Indeed, Shawbrook’s research showed that many challenges such as the costs of bills and debt repayment have persisted as significant worries for a substantial portion of SMEs across the last two years.

Commenting on the findings, Neil Rudge, head of enterprise at Shawbrook, said:

“By July 5th, we will have a definitive outcome that will shape the direction of our government for the next four years. Naturally, this period of transition can cause some apprehension within the business community. Incoming administrations often usher in new policies, regulations, and tax structures, which can disrupt established business plans and make future forecasting challenging, particularly for SMEs.

“It’s important that political parties prioritise the dissemination of clear and detailed information regarding potential policies that may impact SMEs. Ambiguity in such matters can significantly hinder businesses’ ability to prepare for potential changes.

“However, there are positive signs to consider. We are encouraged by the cautious optimism already evident amongst SMEs, reflected in the recent increase in funding applications. This positive sentiment, coupled with falling inflation and the anticipation of an interest rate reduction, suggests a potentially interesting second half of the year for the economy.”