“No need for business owners to panic” advises economic expert

One of the UK’s most recognised economic commentators has advised there’s no need for business owners to panic in light of the latest headlines.

Justin Urquhart Stewart, founder of Seven Investment Management (7IM) and business commentator, expressed his view during an Entrepreneurs’ Forum dinner held at Jesmond Dene House last night.

Addressing North East entrepreneurs, Justin revealed that whilst there are concerns over the latest financial forecasts there are opportunities for businesses to thrive in the global economy.

“Despite everything that’s been announced this week, the global economy is still growing. While it may be half the speed it was a year ago, considering the disasters we’ve experienced, it’s quite astonishing that it’s still growing.

“For business owners, it’s looking at opportunities available. The value of the pound has fallen which means exports are now very good value so businesses can take advantage. Imports are more expensive but it’s looking at whether we can create those products ourselves. The opportunities are there.”

Speaking about the North East in particular, Justin admits that whilst there is “frustration and anger” amongst its business owners, due to the growing global economy, there is “no need to panic”.

Justin added, “North East entrepreneurs are some of the most dynamic people I’ve come across. They are constantly finding new ways of doing things, using their initiative and working amongst themselves.”

The dinner was delivered during a week which saw the value of the pound crash to a record low, mortgage interest rates increase and the Bank of England hint at a 'significant' rate rise.

However, today (Friday 30th September) the Office for National Statistics revealed the UK economy grew by 0.2% in the three months to June, reversing the initial estimate of a 0.1% contraction.

The new figures imply the UK is not currently in a recession as predicted by the Bank of England earlier this month.

Justin also addressed last week’s mini budget which saw chancellor Kwasi Kwarteng announce the biggest package of tax cuts in the last 50 years.

In a mini budget which has been branded ‘reckless’ by market commentators, Kwarteng set out a £45 billion tax-cutting package and plans to borrow £400 billion to fund the giveaway without an independent assessment from the Office of Budget Responsibility.

As a result, UK government bonds and the value of the sterling plunged while government borrowing costs hit their highest level in more than a decade.

Reports already show that the volatility of the pound has caused uncertainty of prices leading to a knock in both consumer and business confidence.

Justin continued, “The mini budget was amateur and irresponsible. 

“Individuals have concerns over energy prices, the war in Ukraine, overall inflation in commodity prices and mortgage interest rates. We need leaders to admit it’s going to be difficult and to provide the light at the end of the tunnel.

“In theory, this budget was supposed to give support but in reality it has put the fear of God into us. This is where you need calm and clear messaging.”

Elaine Stroud, CEO of the Entrepreneurs’ Forum said, “We really value Justin’s encouragement that entrepreneurial businesses are well suited to grasping the opportunities presented by changing market conditions. It will be interesting to see how our members can take advantage of the current economic challenges over the coming months.”