In 1997 the Labour Party delivered a party-political broadcast featuring D:Ream’s Things Can Only Get Better – the rest they say is history.
The song became Tony Blair’s mantra as his party won a landslide victory in the subsequent General Election – the first of three consecutive victories for Blair’s Labour Party.
Despite no shortage of economic challenges during that period, there is no doubt that the rhetoric was one of optimism and the result was a period of significant economic growth with inward and public investment at record levels.
The new Government may claim to have been dealt a more challenging hand than Tony Blair almost 30 years ago but regardless of the circumstances, the value of promoting optimism cannot be understated.
After a speech claiming that things could actually get worse (before they get better), we have had a Budget that certainly looks positive in the long term with major investment commitments including £1bn in aerospace, £2bn in vehicle development and £500m into life sciences but also serves up some significant pain for business in the short term
Following the Budget, there were a raft of surveys like the BDO Optimism Index, the CBI’s Growth Indicator and the PMI all telling us the same thing – business confidence had taken a real knock.
The great economist John Maynard Keynes talks a lot about confidence and the animal spirits of firms and people when making decisions and so sentiment is an incredibly important for an economy.
Factors such as inflation and interest rates all play their part in driving consumer spending and business investment – but this has to be underpinned by an optimistic outlook.
The UK fundamentals are good. Inflation is stable, interest rates are falling, employment and wages are rising.
The Government is working to create the right conditions for a housebuilding boom and there are much more grown-up conversations taking place about resetting the UK’s relationship with the EU, still by far our largest and most important trading partner.
According to a survey of 100 economists by the Financial Times, the UK is likely to outperform the EU in the coming year (while lagging behind the US) and the annual MAKE UK/PwC Senior Executive survey said UK manufacturers still expect opportunities to outweigh risks in 2025.
All of this is good news.
In the year ahead, the UK economy is set to grow between 1.2 and 1.5% depending on a number of the factors previously mentioned and while this is by no means a boom, it is certainly the kind of territory that every business owner would welcome with open arms.
When running a business you have to deal in realities, but we should also be cautious about listening too closely to those – particularly in the political arena – who might seek to push a negative agenda for their own aims.
It is time to start focusing on the positives and ensuring that we are all creating the right vibes for a really successful 2025.
