See the big picture
Despite ongoing challenges, I'm feeling quite optimistic about the year ahead. Many business fundamentals still look good, and I expect to see a steady overall improvement in the economic outlook. While growth may be slower than anticipated, I think there will still be opportunities for businesses to invest wisely to support their growth ambitions.
Head of Mid-Corporate, London and South East, Barclays Corporate Banking
Although the introduction of a new Government has hopefully brought a bit more political stability from a national perspective, and inflation is not as high as it has been in recent years, I expect 2025 to continue to throw up various challenges for business, many of which have persisted for some time now.
Energy costs haven’t reduced as expected, so it’s possible that businesses with expiring long-term contracts may need to consider how to manage these ‘additional’ costs as they look to renew.
Of course, certain geopolitical factors and rising container costs have contributed to ongoing supply chain disruption in 2024, and this is unlikely to ease. Several of our clients across the region, particularly in manufacturing and retail, are now looking into long-term, viable alternatives to help diversify their supply chain and reduce their reliance on the traditional ‘East to West’ movement of goods, and I expect to see more businesses adopt this approach in the year ahead.
Turning to talent
Businesses across London and the South East are likely to be affected by salary inflation and the employers’ NIC increases announced in the Autumn Budget on overall staff costs. In addition, the well-reported UK skills shortage continues to affect businesses across the region, particularly those in healthcare, education and construction.
As such, this year I think we’ll see more businesses explore what strategies they could adopt to reduce the skills gap, particularly across the ‘middle’ skills set where my clients say it’s often felt most acutely.
Furthermore, although it's still too early to say what impact the apprenticeship levy will have, hopefully ,the government, businesses and educational institutions will continue to help encourage more young people to join some sectors and develop the skillsets needed for the future.
Navigating the transition
I’m increasingly hearing from clients that Environmental, Social and Governance (ESG), the framework that helps businesses understand and measure their impact on society, the environment and how transparent and accountable they are, is likely to continue to play a big role in 2025.
Now that large companies need to report on their progress on various sustainability matters, they are increasingly requesting the data relevant to their reporting requirements from mid-corporate and other businesses in their supply chains, Taking action in this space is becoming more important in winning tenders and I think we’ll see more of our mid-corporate clients working on their net zero transition plans over the coming year.
There is business opportunity from the transition to net zero and that is why we are seeing businesses progress their efforts. In fact, several businesses have suggested that balancing the cost of the transition with existing financial pressures is going to be a key challenge for them this year.
Complying with sustainability requirements is becoming less of a choice and more of a necessity, and businesses may want to ensure they have a solid strategy to help them access the finance available to fund the transition.
Head of Mid-Corporate for London and South East
Now is the time for financial discipline – businesses may want to ensure they have proper liquidity management in place to maintain financial flexibility and resilience.
While focusing on growth is important, businesses may also want to identify how they can leverage technology, automation and other tools to improve operational efficiencies, reduce costs and drive meaningful business improvements.
Collaborating with local colleges and universities can help a business to raise its profile as a prospective future employer, while enabling it to play a role in aligning curricula with industry needs and providing placements to help students develop skills for the future.
If you’re looking to unlock growth opportunities to move your business forward, our £22bn Business Prosperity Fund is available through some of our borrowing and refinancing options. See how we could work together to achieve your ambitions and strengthen the UK economy. Subject to normal lending assessment, status and application. Terms and conditions apply.
Keeping fraud front of mind
Fraudsters are as active as ever, impersonating our colleagues and attempting to defraud our clients. To help protect you and your business we have a wealth of resources available. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.
To discuss your business requirements and how Barclays can support you, contact us today.
