Businesses in Northern Ireland will this week be feeling more uncertain than ever about the future of their businesses. The triple lock of rising inflation, rising interest rates and excruciating continued U-turns on tax policies makes forward planning near impossible. One local financial expert, Ross Boyd of Belfast-based RB+ Chartered Accountants says its inertia and incompetence that have led to this dangerously challenging situation.
Ross said, “They say a week is a long time in politics. Well Liz Truss lasted just over six weeks, leaving a crisis-hit economy and a legacy that businesses in Northern Ireland will be dealing with for years to come. The backbone of our local economy are owner managed businesses – and they are now under even more pressure because of this new ‘triple lock’. They are resilient and many are already planning how they intend to navigate 2023.
“The simple truth is that they will have to factor in a massively escalating cost base due to increased interest rates as a result of a now infamous half-baked fiscal policy, spiralling inflation (currently at its highest in 40 years) and ultimately higher rates of taxation after the much-publicised reversals and U-turns of the past month.
“Every business in Northern Ireland is now faced with compromised margins and shelved expansion plans. Their spending power is reduced and the knock-on effect of this is a loss of confidence in the economy, and a more cautious approach. This in turn will hinder investment and impact on job creation. And that’s for the lucky ones.”
As pressures mount, Ross flags that the risk of insolvency becomes all the more great to businesses already in recovery from the fallout of the pandemic.
He says: “There will be many locally owned businesses who will not make it through the next year. As pressure on these business owners mount, insolvency looms ever larger in the rear-view mirror. Sadly, many of these businesses already know the writing is on the wall. Some have called it incompetence at Westminster – and it’s hard to see history being kind to this government given the direction our economy has taken. But at least they were there. Political inertia is crippling the private sector in Northern Ireland. We remain leaderless and therefore rudderless. Does this look attractive to external investors? Sadly – we can all agree it is not a good look.
“There is no doubting how resilient the private sector is in Norhern Ireland and many businesses will continue to succeed even in such challenging times. There will be also be many that will not. They need to be seeking advice now to help them navigate what is likely to be a very challenging year ahead.”
