The UK’s gross domestic product (GDP) registered zero growth in the final quarter of 2019, with leading business groups leading calls for the upcoming Budget 2020 to provide a new wave of optimism for the nation’s small business community.

New data released by the Office for National Statistics (ONS) confirmed that UK GDP flatlined between October and December last year. Tej Parikh, chief economist at the Institute of Directors (IoD), described the UK economy as being “in a funk” before adding that businesses “will be looking for a significant boost from the Chancellor next month”.

“It’s likely that political uncertainty and unwinding stockpiles caused the economy to flag at the end of last year,” added Parikh.

“However, firms entered 2020 with more of a spring in their strip. Confidence has shot up, while hiring plans and investment intentions have also risen a notch, but the post-election bounce may tail off.”

Mr Parikh also said that undercurrents regarding the next stage of the UK’s Brexit negotiations, along with other “hiccups in global growth” could prevent the UK’s GDP from gaining momentum this year without the Budget 2020 giving small firms some fiscal headroom.

“The Chancellor must clear the way for entrepreneurs to create jobs and drive up productivity, by unleashing investment in start-ups, slashing business rates and revamping our skills system,” added Parikh.

The sentiments of the IoD have been echoed by the Federation of Small Businesses (FSB), with national chairman, Mike Cherry agreeing that Budget 2020 will be seen “as a chance to turn things around and create a pro-business environment that encourages growth and success”.

“For too long, small firms have been in the doldrums with business confidence in negative territory for the entirety of 2019,” added Cherry.

“This negative confidence has seen small firms hold back on investments, exports and hiring intentions.

“The Budget next month is a chance for the Chancellor to illustrate his support for small firms that he committed to during the General Election campaign.”

Budget 2020 would have been Sajid Javid’s first annual fiscal statement at the despatch box, but his shock resignation from the second most powerful post in UK politics means there will be another fresh face holding the famous red briefcase on 11th March.

Javid’s replacement is 39-year-old, Rishi Sunak. It marks a huge promotion for Sunak, having been operating as a Junior Minister for Housing, Communities and Local Government and then chief secretary to the Treasury since July 2019.

Sunak may be a relative unknown to those on the fringes of UK politics, but in the Conservative Party he has been earmarked as an “exceptional individual” and very much one for the future. Whether Sunak is capable of getting a grip on the UK’s public finances within three-to-four weeks of the Budget remains to be seen, although Sunak has shrugged off reports suggesting that Budget 2020 could be postponed for a short time to give him time to prepare his centrepiece speech. 

The new Chancellor tweeted that he is “cracking on” with preparing the Budget, ready to “deliver on the promises” made by the Conservatives during December’s general election.

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