From the Chancellor’s Summer Statement, it is clear that the Government is keen to get the economy moving. The package of measures alone may not be enough to get Britain back in business; many organisations are emerging into a dramatically altered market environment, with staff under pressure and further challenges on the horizon. But it’s not all bad news. The lockdown has presented a unique opportunity for organisations to review whether “business as usual” was working for them, and could lead to improvements and growth in the long term.
Sunak offers businesses a lifeline
The focus of Rishi Sunak’s Summer Statement was on drawing the furlough scheme to a close while preventing spiralling unemployment. Employment is a key concern following business closures, market contractions and mass redundancies. The measures announced include:
• No extension to the furlough scheme beyond October 2020;
• £1,000 bonus to businesses for each employee returned from furlough and still employed by January 2021;
• £2bn scheme to create jobs and training for young people.
There was also some targeted support for industries hardest hit by lockdown with a temporary cut to VAT on food, accommodation and attractions from 20% to 5%. In addition, “eat out to help out” vouchers will provide 50% off meals to consumers to participating restaurants throughout August.
Changing markets, challenges and opportunities
The world is a different place to the one that locked down in March. Some markets have collapsed, others have thrived. Customer expectations and disposable incomes have changed, supply chains have been disrupted and the priorities of both businesses and consumers has shifted. This level of disruption means that companies must be agile, adapt to the changes and move quickly to grasp opportunities as they arise.
Embracing the opportunity to change
While many are keen to get back to business as usual, it’s worth taking the time to consider how well that was working for your organisation and your team. Given the changes in the business landscape, sleepwalking back into the way things were may not be an option. This is an opportunity to make organisational and logistical changes that improve agility and productivity. This may help your business become more adaptable to the changes to your market opportunities and thrive in challenging times. Evaluating your currency risk is one such option.
How is the pound performing in the currency market?
The response of the currency market to the Chancellor’s statement, which also included a temporary cut to stamp duty and a green homes grant to restart the property market, was initially muted. The uncertainty regarding Brexit is casting a long shadow. However, progress on some of the sticking points between the UK and the EU, together with some reflection on the Government’s package of support meant that the pound made gains the day after the measures were announced. While the Government approach has its critics and there are several caveats, there was a sense of optimism which benefited sterling in the short term. Whether this hopeful atmosphere lasts depends as much on the progress of the Brexit negotiations as it does on how businesses succeed as lockdown eases.