She said:
Since last year’s referendum the economy has defied Brexit fears to perform significantly better than most people expected. Looking ahead, in the short term, hopes for the UK economy are increasingly pinned on exporters picking up the baton and taking advantage of the low pound while investment and consumer spending slow as a result of uncertainty and rising costs.
As inflationary pressures permeate the supply chain, margins may be further squeezed, which will require businesses to reassess their plans, incorporating also the introduction of new business rates, the Apprenticeship Levy, and the National Living Wage. This offers the Government limited space to tackle pressing domestic issues like business rates, the NHS and social care funding whilst also delivering a ‘steady as she goes’ budget.
“With the biggest Brexit moments for the UK economy yet to come, businesses will be heartened to hear the Chancellor signal he is preparing for Brexit’s most significant risks and opportunities. This means investing in building up the UK’s infrastructure to support skills and trade. Plus setting a significant fund aside to protect our economy in the event of a cliff edge situation, where no deal is struck.
“The Government may also be wise to consider investing in greater public information around Brexit. After speaking to wide a range of companies, it is clear that a reality gap is emerging between what is actually going to happen on Brexit, and people’s expectations or fears. Examples of this include EU citizens worried they must return home as soon as Article 50 is triggered and businesses who don’t fully understand the practicalities of exporting outside the EU in relation to supply chains, tariffs and non-tariff barriers.”
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Paul Middleton, Corporate Communications Senior Manager at KPMG: +44 (0) 20 7694 2180/ paul.middleton@kpmg.co.uk
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