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Business Review September 2023

Business Sentiment At 18-Month High

The latest Lloyds Bank Business Barometer has revealed a sharp rise in confidence among the business community, driven by a more upbeat view of economic prospects.

August’s survey reported a headline confidence figure of +41%, a 10-percentage-point uplift from the previous month and the highest level since February 2022. This surge in confidence was primarily due to growing sentiment about the broader economy, with a 15-point rise in the economic optimism figure.

Commenting on the findings, the commercial bank’s Senior Economist Hann-Ju Ho said, “The bounce in economic optimism is the standout point. Our analysis shows that businesses felt relief that interest rates may be reaching their peak, alongside hopes that measures to tackle inflation are having an impact. With trading prospects remaining stable, and hiring and wage intentions also rising, the macro environment for small businesses is more upbeat.”

Another survey also points to growing business positivity with the proportion of small firms currently working on specific growth plans at its highest level in three years. Data from a Novuna Business Finance poll shows that 71% of small businesses owners now have specific growth strategies designed to improve their future prospects, a significant rise from 65% in the first quarter.

Calls For Integrated Transport Plan

A leading business group has called for the introduction of an integrated national plan on transport infrastructure focused on at least a 20-year time horizon.

The Transport Select Committee has launched an inquiry into the government’s strategic transport objectives and, in its written evidence to the Committee, the British Chambers of Commerce (BCC) said weaknesses in the current system are creating barriers for business and hindering growth. The BCC said it wants to see a ‘clear plan’ that will establish ‘an effective transport network’ to underpin economic growth in the years ahead.

Using feedback from its network of chambers located across the UK, the BCC told MPs that any transport plan must include: efficient road and rail access to key international gateways to enable international trade; increased reliability, capacity and connectivity in passenger rail services, and greater investment in local bus and public transport services.

The BCC also noted that businesses typically believe Westminster transport policy has been ‘very patchy and unclear.’ It therefore suggests that, while central government should lead on major national infrastructure planning and delivery, regional infrastructure, funding and decision making should be devolved in order to develop a plan capable of delivering ‘real benefits to every region.’

Firms Warned About Cyber Chatbot Risks

Officials at the National Cyber Security Centre (NCSC) have warned UK firms about the potential risks associated with integrating artificial intelligence-driven chatbots into their businesses.

In a pair of blog posts released at the end of last month, the NCSC stressed that cyber experts do not yet fully understand the ‘capabilities, weaknesses, and (crucially) vulnerabilities’ of algorithms that create human-sounding interactions, which have been dubbed large language models (LLMs). These AI-powered tools are seeing early use as chatbots incorporated within customer service roles and for making sales calls.

Academics and researchers, however, have repeatedly found ways to subvert these chatbots by feeding them rogue commands. This means they could potentially be tricked into performing harmful tasks, which may lead to a rise in cases of fraud and data breaches.

In conclusion, one of the blog posts warned, ‘Organisations building services that use LLMs need to be careful, in the same way they would be if they were using a product or code library that was in beta. They might not let that product be involved in making transactions on the customer’s behalf, and hopefully wouldn’t fully trust it yet. Similar caution should apply to LLMs.’


Three-Point Plan To Hit Net Zero

A report jointly published by the BCC and Lloyds Bank suggests three key changes are needed to help business reach the government’s Net Zero target.

The three recommendations – which were developed following a six-month deep dive into the reasons holding firms back from reaching Net Zero – are: the government should review its support and advice to SMEs on moving to Net Zero; large businesses and institutions must continue to drive behaviour change in their supply chains, and the government should demonstrate commitment and consistency in its Net Zero plans.

Research previously published by the BCC found that only one in ten SMEs fully understand what the Net Zero target means for them, with smaller firms tending to display lower levels of understanding than their larger counterparts.

BCC Director General Shevaun Haviland said “Many smaller firms feel lost in a fog of conflicting information and are reluctant to invest in new technologies when they fear betting on the wrong horse. Mixed messages from the government on the importance of Net Zero are only compounding the problem, as well as a ‘stick’ heavy approach to enforcing change. We need a coherent system of free support and advice made available for firms across the country.”

FSB Publishes Christmas Wish List

The Federation of Small Businesses (FSB) has released a Tinsel List of asks which it argues would bring much-needed cheer to the tourism, hospitality and retail sectors in the run-up to this year’s festive season.

Although it may still be almost a hundred days until Christmas, the UK’s largest business group has said ‘it’s never too early to start planning for the festive season – particularly when it comes to our small business community.’ The FSB is therefore asking policymakers to act now in order to ensure some festive economic cheer.

The Tinsel List begins with a request for more accessible high streets, with better parking availability and public transport options. It also includes a request to raise the VAT threshold to £100,000 in order to spark growth across the economy and an increase in the Small Business Rates Relief threshold to £25,000, a move that would remove 200,000 firms from the rates system.

Additionally, the FSB has asked for action on energy costs with small firms who negotiated contracts at the height of last year’s energy crisis able to ‘blend and extend’ those contracts to benefit from lower wholesale prices. Finally, the FSB would like to see tax-free shopping for international visitors reinstated.


AI Jobs Concerns

A survey by strategic skills provider Corndel has revealed the extent to which young workers fear their jobs are at risk due to the rise of AI. Just over six in ten 18 to 34-yearolds said they believe new technology will take at least a quarter of their role by 2033, while almost four in ten thought AI will take at least half of their job within the next ten years.

Rise In Rural Microbusinesses

Research from GoDaddy shows significant growth in the number of rural business start-ups with nearly 100,000 microbusinesses launched in rural areas of the UK over the past year. This increase means that 26% of the country’s microbusinesses are now based rurally, up from 24% the previous year. The data also shows a greater proportion of female and older rural entrepreneurs compared to their city-based counterparts.

Top Universities For Aspiring Entrepreneurs

Novuna’s analysis of LinkedIn data covering nearly 2.8 million alumni between 2020-2022 has revealed that the University of Cambridge is the country’s top academic institution when it comes to producing entrepreneurs. Other universities featuring near the top of the entrepreneurial table were: SOAS University of London, London School of Economics and Political Science, Goldsmiths University of London, University of Oxford and University of Cumbria.


Talking About Mental Health At Work

Research conducted by recruitment website has found that more than half of all UK employees would not be comfortable disclosing mental health or psychological conditions to work colleagues, with millennials the generation most uncomfortable discussing such issues.

These findings were based on a survey of 2,000 UK workers and jobseekers which sought to ascertain attitudes to mental health in the workplace. The research found that 57% of millennials would not feel comfortable opening up to their colleagues, while baby boomers were perhaps surprisingly the most comfortable with only 45% admitting they would not want to disclose mental health issues at work.

While the research does therefore show that mental health may still be a taboo subject in the workplace, there were some encouraging signs which suggest employees may be starting to feel more comfortable talking about mental health at work. The key reasons for this change were:

  • 38% felt it was becoming less of a taboo subject
  • 32% had seen colleagues discuss mental health with a positive outcome
  • 24% cited friends and family opening up with a positive outcome
  • 24% noted a rise in discussions around mental health on social media.

Commenting on the survey’s findings, Reed’s UK Managing Director Simon Wingate said, “We’re seeing conversations about mental health becoming far more commonplace in our real lives, but there’s still some way to go in our working lives.

We need to ensure we’re encouraging employers to create safe, inclusive working environments that workers feel comfortable being themselves in, and we need to empower jobseekers and employees to feel confident if they need to speak up about their mental health. This open dialogue between co-workers will lead to greater job satisfaction and productivity, and ultimately a happier and healthier workforce.”


Workers Seek Jobs With Mental Health Support

Data from Flexa’s latest Quarterly Flexible Working Index has reported further growth in demand for roles offering mental health support to employees.

The Index analyses pooled data insights from over 350,000 job searches and preferences expressed by more than 8,000 jobseekers regarding their desired location, schedule and work style. Across Q2 2023, an average of just under one in three workers expressed a preference for positions that offer mental health support; this represents

a 20% increase in demand for such services since July 2022. Flexa’s CEO and co-founder Molly Johnson-Jones commented, “Employers who make robust mental health support accessible to all staff year-round have something worth shouting about. They have exactly what employees are looking for right now.”

All details are correct at the time of writing (11 September 2023)

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