With a fragile economy and a general election edging closer, 2024 is set to provide a raft of challenges for UK businesses. But will 2024 be the year that the UK turns the page into a positive new chapter?
Drawing on his expertise in restructuring, Rehan Ahmed, a managing director with leading advisory firm, Quantuma, provides his predictions for the UK business environment in 2024.
Rehan focuses on corporate recovery, restructuring and turnaround in Quantuma’s rapidly expanding Leeds office. He provides advice and solutions to accountants, solicitors, lenders and directors in respect of small to medium-sized enterprises in all business sectors, performing both formal and informal business reviews.
In last year’s predictions, we positioned 2023 as a year of recalibration, as we all adjusted to a new normal, and this was largely the case. We expect some overhang of this adjustment into 2024, as progress has been slow. So, it looks likely that the UK is set to endure another year of stagnation.
We expect 2024 to be dominated by politics with Keir Starmer overwhelming favourite to be voted in PM and Donald Trump expected to win the Republican nomination. 2024 is likely to be a busy year of restructuring with businesses, homeowners and debtors attempting to reorganise their finances to cope with the new environment.
Our 2024 predictions
Recession
It didn’t come in 2023 and we don’t think there will be one in 2024 either. Any growth will be lacklustre though, as the recovery continues.
Formal insolvencies
Will increase again. We don’t anticipate a tidal wave, but expect a definite increase on 2023 figures, as the level of debt taken on during the pandemic, combined with interest rate increases, becomes too much for many businesses who will need to formally restructure.
HMRC
Continuing to be at the forefront of winding up petitions and taking an aggressive stance to recover tax where it is due. We predict more petitions from HMRC than in 2023.
Debt bubble going pop
We have long been concerned over the level of global debt and the increase in the same since 2008. We believe there is going to be a big pop somewhere in the system during 2024 which will cause shocks in the market. This could be Italy or it could be the housing market in the US again.
Interest rates
We expect interest rates will come down finally at some point during the year, but expect a new normal of around 4%.
Inflation
Barring some further systematic shocks, we predict that inflation will stabilise during the year close to target levels.
AI
Will be everywhere during 2024 and AI will start to become routinely used. Embrace it.
Remember what IBM said…
“AI may not replace managers, but the managers that use AI will replace the managers that do not.”
Bitcoin
We still don’t get it. We are calling a drop (again!).
Lending
We expect that lending will continue to be a challenge with affordability being at the forefront of lenders’ minds, based on interest rates at a new normal. This is part of the readjustment and will be in part responsible for some of the formal restructuring that will come through.
Let’s talk
If you would like to discuss any of the issues raised in this article or how we can support you or your clients, please feel free to get in touch.
Rehan Ahmed
Managing Director
Restructuring & Insolvency
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