A study by specialist lender Shawbrook has identified political uncertainty as the primary concern for small and medium-sized enterprises (SMEs) in the UK.
Over half (51%) of the respondents are apprehensive about the potential change in government.
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The survey indicates a shift in the concerns of SMEs, with 50% of them citing the unpredictability of the political landscape as a major worry.
Shawbrook’s study comes as the country approaches a general election on 4 July 2024.
Rising operational costs remain a critical issue for SMEs, with 73% of those surveyed acknowledging it as a top concern, an increase from 68% the previous year.
Furthermore, 26% expressed a very high level of concern regarding the expenses involved in running their businesses, underscoring the increased financial strain.
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By GlobalDataThe cost-of-living crisis is also impacting business owners, with 69% concerned about the year ahead.
While economic uncertainty remains a significant worry for 66% of respondents, this figure has decreased from 69% in the previous year.
Other challenges such as interest rates and supply chain disruptions are also causing anxiety among SMEs, with 67% and 57% respectively expressing concern.
Shawbrook’s research underscores the persistence of issues like bill costs and debt repayment as major worries for a considerable number of SMEs over the past two years.
Shawbrook head of enterprise Neil Rudge said: “Incoming administrations often usher in new policies, regulations, and tax structures, which can disrupt established business plans and make future forecasting challenging, particularly for SMEs.
It is important that political parties prioritise the dissemination of clear and detailed information regarding potential policies that may impact SMEs.
“We are encouraged by the cautious optimism already evident amongst SMEs, reflected in the recent increase in funding applications. This positive sentiment, coupled with falling inflation and the anticipation of an interest rate reduction, suggests a potentially interesting second half of the year for the economy.”
