Unemployment rate of 4.5% is a good sign, but UK businesses still need help

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While the recent drop in the UK unemployment rate to 4.5 per cent reflects a strengthening economy, vulnerabilities still exist, financial sector representatives say.

Container director Douglas Grant said that while the data suggests a strong and recovering UK workforce, attention needs to be paid to business supply chains and the growing pressures participating businesses face on a daily basis.

“Indeed, the Confederation of British Industry (CBI) recently suggested that the UK economy has been plunged into a supply chain crisis, with stock levels at major retailers at their lowest since 1983 due to labor shortages and transport disruptions caused by Covid, the blockade of the Suez Canal in March and Brexit, ”Grant offered. “At Conister, we currently have several cases involving significant breakthroughs in many industries that are unable to proceed due to supply chain bottlenecks and therefore block any potential growth. In addition, we are seeing rising inflation and labor costs, limiting any business growth. “

Grant predicted that UK business demand for working capital would reach unprecedented levels as more companies desperately seek capital to address supply chain issues while adjusting to post life. -EU.

“We are already experiencing a debt burden on UK SMEs which has reached record levels and has unfortunately already created an endless stream of weak, zombie-like businesses falling off a cliff of default,” Grant observed. “It is imperative that we support sectors and businesses that are strong and agile enough to adapt to the new economy and thus continue to contribute to its growth.

Grant said the introduction of the Recovery Loan Scheme (RLS) will provide additional support for businesses with high potential but struggling to access working capital. Conister is accredited to administer the initiative. “We were delighted to see the government look beyond clearly more resilient lines of business and introduce RLS that can support businesses that have been primarily negatively affected by COVID-19, such as the hospitality and leisure industries. Grant said. “Conister will continue to do everything possible, working with government and traditional lenders, to support businesses. “

The economy is showing strength, but like Grant, Ian Warwick, Managing Partner of Deepbridge Capital, said the need for targeted assistance remains.

“Today’s unemployment data shows the resilience of the UK economy as economic stimulus wears off,” Warwick said. “With economic stability and growth always at the top of the agenda, it is therefore more important than ever to support large-scale businesses, especially in high-growth sectors such as digital technologies and the sciences. life.

“They will be at the heart of economic growth as we create an economy fit for the 21st century. “

Warwick credited the Enterprise Investment Scheme with being an important source of funding at this crucial time.

“Government initiatives such as the Enterprise Investment Scheme (EIS) have never been more important in helping entrepreneurs and innovators find the financing they need, while providing private investors with tax incentives to develop portfolios UK-backed private equity, ”Warwick said. “With our EIS funds reaching record funding levels in 2020/21, it is evident that there is considerable demand from investors and financial advisors to invest in UK start-ups which we believe will be at the vanguard of our economic recovery. “

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