Any chance of some good news around the economy?

It has certainly felt like a long journey toward better economic news, and the view in Q1 was that we would see light at the end of the tunnel by now. But are we?

Naturally, most are concerned about the budget to come in November, and it does look as though the Chancellor faces a challenge not to raise taxes and break Labour’s election promise. If this happens, one just knows the political debates will grow fiercer and confidence will ebb away, as is often the case. What is really needed is a far more positive growth forecast than we’ve seen so far, and the lack of one is making several businesses cautious in their approach.

This has been a tough year, and small businesses especially have found it a strain. Some argue that it has been harder than 2008–09, but at least then the economy rebounded with some energy into 2010–14. Others note that the UK hinders investment with its political instability, which seems to lurch from one crisis to another. It has been observed that most people once felt secure with the overall structure, but today that structure is called into question, and this naturally undermines confidence.

Business can feel on its own as it faces a whole number of battles, and of course this hinders what is needed most: fresh thinking, change, and new vision. What naturally dominates is traditional thinking and those who resist change. Can this be overcome, as change will be inevitable?

We have listened to narratives of frustration from operators of all sizes this year. People see the change that is needed but find that the “blockers” hold the power in such a difficult market. How can this be overcome is a consistent question.

All these questions are being posed across the country. In fairness, the argument is that if a model works, why change it? The answer, of course, lies in how sustainable a model is before it breaks. There are concerns that some models are already struggling and in need of evolution.

The latest economic forecast does little to inspire confidence. GDP growth is projected to remain unchanged from the previous forecast at 1.2% in 2026 and 1.5% in 2027. Business investment is now projected to grow by just 1.6% in 2025, a significant downgrade from 4.8% in the last forecast. Inflationary pressures are set to persist, with headline CPI expected to peak at 3.7% this year before starting to fall back in 2026 and 2027. Given these persistent upward pressures on prices, the Bank Rate is expected to remain at 4% by the end of this year, with only two further cuts anticipated by the end of 2026 as the Bank remains cautious about inflation.

What is needed most right now is stability, which in turn would provide the confidence and certainty for companies to invest and seek growth. As it stands, large companies, with their depth, are able to compete, but there is huge strain on SMEs; yet a healthy economy requires all to feel competitive.

Will Government create this needed confidence? Most seem to doubt it. So can hospitality find a way to build its own strength? It has proven itself time and again—and will need to do so once more. All the great hopes that were felt last year seem to be evaporating, and the great truth today is that business needs to find its own answers.

Whether the overall structure is no longer effective enough is for others to debate. What is needed is for the industry to share ideas, collaborate, and support fresh thinking. As business faces prolonged pressure on margins, people cuts and investment in AI will be inevitable. This is not all bad, as it will press the industry to modernise, but it would be a far better journey if set against a more supportive backdrop.

Few would bet against the industry overcoming its present challenges, but perhaps a more open and collaborative approach could help it—and others—move forward.