Business continuity boost as IMF makes UK top dog

Britain is the leading country in the developed world when it comes to economic growth, according to the International Monetary Fund (IMF).

The UK was tipped by the IMF Global Economic Outlook to enjoy a rise of 3.2 per cent in its gross domestic product over the course of 2014, easily outperforming other members of the G7 and G20.

All this implies good news for British companies, which makes business continuity seem like a fairly easy task except where there are serious issues arising from bad decisions and mismanagement – for example, at Tesco. For a great many companies, the outlook spells fresh growth, more investment, greater income and the recruitment of more staff to handle the extra demand for their products and services.

Indeed, the health of the UK economy is improving due to the recovery moving increasingly in the direction of the rebalancing the government and economists want to see. The IMF report said Britain’s economy “has rebounded and become more balanced”.

The UK and America were highlighted as being the economies with the greatest recoveries, although the issue of interest rates is still a concern. On the one hand, they are expected to start rising next year, which will trim UK growth to a still-healthy 2.7 per cent. However, the IMF noted, the kind of gradual increases that are generally expected may have to be abandoned for a more disruptive series of larger, swifter increases, should the housing market overheat or inflation surge – although neither appear likely in the UK anytime soon.

However, the possibility that the UK economy may slow down faster or the upward trajectory in rates will be steeper could yet provide some significant problems for businesses.

Another concern will be that faced by exporters. The report identified the eurozone as an area where the recovery “could stall”, turning low inflation into deflation and stagnation. Such a situation would become “the major issue confronting the world economy”.

This would certainly be true for UK exporters, which may act as a reminder of the need to have contingencies in place, as well as seeking to spread their trading base more, with a greater focus on custom from countries whose economies are still thriving.

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