UK's economic outlook downgraded: 4 ways to reduce the impact

The latest Quarterly Economic Forecast (QEF) from the British Chambers of Commerce (BCC) has revised down UK growth expectations for 2025.

The QEF expects the UK economy to grow by 0.9% in 2025, revised down from the previous forecast (1.3%). Costs are rising, business investment and exports are suffering and inflation and interest rates are expected to stay higher for longer – not ideal situations for growth!

Chair of the BCC Economic Advisory Council, Vicky Pryce, was quoted as saying:

“This is going to be a long and challenging year for UK businesses. The BCC’s forecast shows an economy struggling without the secure foundations to kickstart business investment.”

Some light at the end of the economic tunnel

In challenging economic times, there are tactics and strategies you can put into play to mitigate the rising costs and keep your small business competitive.

We’ve highlighted four different steps you can take to brighten your own economic outlook, with simple strategies for mitigating the current poor UK trading conditions.

1. Focus on cost efficiency and cashflow management

Rising cost pressures and slower growth are predicted. So now’s a sensible time to review your expenses, negotiate with suppliers and get in control of your cashflow management. Think about putting energy-saving measures in place to cut electricity and gas costs, and getting serious about spend management to reduce your overheads and key expenses.

2. Explore new markets and diversify your revenue streams

With the export market looking highly unstable, especially across the Atlantic, it’s a good idea to look for new domestic or international markets to reduce your reliance on existing customers. Getting more diverse with your revenue streams can also help make the business more resilient. Think about moving into new products, services or online sales channels.

3. Invest in digital technologies, AI and automation

Embracing digital technologies can help the business become more efficient and improve your overall customer engagement. Look into digital skills training for your employees and make better use of online sales and marketing to help your business adapt to changing consumer behaviour. This is a great way to remain competitive and keep revenues high.

4. Build stronger customer relationships and band loyalty

Retaining existing customers is a crucial tactic for getting through uncertain times. Make sure you’re delivering the best possible customer service, building strong relationships and offering loyalty programs. Happy customers are more likely to stick around and spend money, even during economic downturns and the current cost-of-living crisis

Talk to us about creating a brighter outlook for your business

It’s a tough time for UK small businesses – there’s no getting away from this reality.

But by working closely with your advisers, there are steps you can take to make your business competitive and turn the gloomy forecasts into a brighter outlook.