With the prospect of a fresh new government in-store and the possibility that the UK might finally move forward with leaving the EU, there’s plenty for businesses to look forward to in 2020, particularly given the enduring uncertainty that has lingered over the UK economy since the result of the Brexit referendum back in 2016.
The UK Economy in 2020
The Bank of England reports that uncertainty about Brexit has been elevated in 2019, with spending suppressed as a result. Quarterly growth is expected to have averaged at just 0.2% during the year – roughly half that of the previous three years.
However, the approval of the second reading of a Bill (by the House of Commons) to implement the Withdrawal Agreement agreed between the UK and EU on October 22 has done much to quell near-term uncertainty and resulted in sterling appreciating.
The global economic outlook also comes into play, as trade wars and protectionism take their toll. The result, according to PWC, is projected GDP growth of 1.3% in 2020.
The UK Property Market in 2020
The UK property market is intrinsically linked with the country’s business outlook. In very simple terms, a strong property market means that consumers are more confident in their spending. It should come as good news to UK businesses, then, that Savills is projecting UK house price growth of 4.0% in 2020. In fact, 2020 looks set to be the strongest-performing year out of the whole 2019-2023 period, based on Savills’ predictions. Compound growth for that period is projected to be 14.8%.
With a strongly performing property market in 2020, it’s likely that both personal and business customers will be shopping around for the best remortgage deals, looking to make the most of a buoyant year after the more subdued house price growth seen in 2019.
Business Investment in 2020
While 2020 isn’t looking overly rosy in terms of business investment, it’s certainly looking more positive than 2019. The British Chambers of Commerce report a forecast decline of 1.5% in business investment in 2019. However, that decline should reduce to just 0.1% in 2020.
Regional experiences have certainly reflected this over the past year. Our look at the Reading market’s industrial performance over the first three quarters of 2019 found a market in limbo, as uncertainty took its toll.
As we move forward into 2020, the UK is in need of certainty and progress. Whether you think Brexit is a great idea or a terrible one, there is a growing need – certainly from the country’s business community – for tangible movement. Companies that have taken a ‘wait and see’ approach for over three years are now finding this increasingly harder to sustain. As such, 2020 could just be the year that the UK finally breaks the Brexit deadlock and allows its business sector to thrive once more.