New Year, New Outlook?


Written by:

Karen Thomas

Head of Corporate Banking South Wales



During 2020, businesses have had to adapt to the dynamic and challenging economic environment.

Throughout the first lockdown, there was a real focus on survival as companies looked towards crisis management strategies, but as we have moved through the pandemic we have also observed some positives, and even new opportunities which have tested both the dexterity and agility of business management teams. These have included finding new markets, pivoting the business to continue to trade within lockdown restrictions or identifying new customer and expanding previously non-core distribution channels.

Many business have achieved this successfully but as we head into 2021, further challenges are afoot. Some businesses will need to adapt to different rules and regulations following the end of the UK’s Brexit transition period, and may use this as an opportunity to find new local suppliers to enhance their resilience, others will be looking at rebuilding diminished stock levels. For many, they will be looking at the careful management of cash flow as COVID-19 loan scheme repayments start and crown borrowing also needs to be repaid.

The housing market has been a shining light in 2020, but I wonder what the impact will be if the stamp duty is returned to pre Covid levels, as planned at the end of March? While many consumers have been impacted by reduced wages, there are large swaths of the population who will have both pent up desire and the financial ability to spend within the domestic market, on home improvements, vehicles or staycations, this will all be good news for the British economy as the ‘multiplier effect’ comes back into play.

Finally, with increasing hopes of a vaccine roll out around the corner, this is likely to result in renewed confidence within the wider market and a potential improvement in the UK’s economic recovery over the months ahead