As 2017 draws to a close, it’s still unclear what 2018 may portend. It’s unclear how (and indeed whether) Brexit will proceed – negotiations with our continental European neighbours have stop-started over the course of the year and lack of political agreement here in the UK as to what Brexit actually means has slowed progress. Remainers still hope to revoke Article 50 and some polls suggest a majority of British voters when confronted with the reality of leaving the European Union would prefer the country to remain. Prominent Leavers talk of a “Hard Brexit”.
The uncertainty weighs somewhat on UK’s growth forecasts for 2018 – consensus figures suggest the UK economy as a whole will grow at 1.3% in 2018, with inflation peaking at 2.5%. This compares to Eurozone growth rates on average of 1.8% and inflation in the region of 1.5%.
Whatever becomes of Brexit, London and the South East seem well placed notwithstanding this and are likely to enjoy a buoyant 2018. The UK’s long history of openness to international business (and consequent attractiveness to inward investors), of resilient domestic businesses and our stable legal and tax regimes mean the UK is still an excellent place to do business.
Despite some macroeconomic uncertainty, the real estate market has held up well and we are still seeing significant interest from both domestic and international buyers. Notwithstanding some political disagreement between governments, Chinese investors still see Greater London as an attractive market where there are deals to be done at the right price.
Technology is booming. FinTech is enjoying renewed interest as technologies such as Blockchain find wider application. Augmented Reality and Virtual Reality are moving beyond niche uses as processing power grows and miniaturisation proceeds apace. Artificial Intelligence is increasingly found in everyday life in everything from virtual assistants to traffic directions. All this bodes well for innovation and for Greater London as an innovation hub.
Clients are cautiously optimistic about prospects for the New Year – they see growth ahead and hurdles which can be navigated. They need pro-active practical expertise with a human face – advisers who help them pre-empt and solve the problems they will encounter. We see increasing demand, inter alia, for our tax and VAT advisory services as well as our outsourcing services as clients both look to be compliant and as tax efficient as possible, and to outsource what isn’t core to their business.
We’re cautiously optimistic that 2018 will be good for UK business.