UK businesses can now look forward to the easing of restrictions and pent-up demand as vaccine boosts confidence. Luke Davis, CEO of IW Capital, comments on the success of the vaccine and how it will impact businesses and future investments in the UK.
The recent success of the UK vaccine roll-out has sent business confidence to a six-year high despite January’s lockdown measure, lifting the hopes of service sector firms across the country that have been forced to close. The latest data from IHS Markit has shown a decline in signals growth last month from 50 to 39.5, but the rapid rollout of the vaccines, that have now protected 10m people against COVID, has meant that business confidence for the next 12 months is at its highest level since May 2014.
Since the onset of the pandemic, the vaccine roll-out success has been the first real news announcement that has viable potential to support society back to ‘normal’ and this is in no small part down to vital biotech innovation that has been able to move forward at record speed when it was crucially needed. For the businesses across the country that have been forced to close and cease trading, they can now look forward to the easing of restrictions and pent-up demand that will act as a springboard to recovery later this year.
Private investment is a vital catalyst for wider economic growth – with the UK’s high net worth community providing essential early indicators for the direction of wealth at a time where the distribution of capital is key. With a 12% increase in new businesses starting up during 2020 compared to 2019, 2021 is set to create some exciting investment opportunities for investors throughout the country and some that are sure to boost the wider British economy, with 44% of investors now looking to back UK-based companies rather than global firms.
Over and above its financial impact, the vaccine’s success also serves as a significant moral booster for the UK’s workforce in a period where uncertainty is rife and the economy is only as strong as the workforce that underpins it. The wider sentiments of returning the work safely is paramount and with the widespread roll out of the vaccine, many across the UK will now be able to return to their jobs in a safe manner without having to worry about their health, furthermore helping to revitalise the economy from the ground up.
The vaccine’s success so far is a welcomed sight for investors and businesses alike, and now with business confidence at a high and with investors looking to back British businesses, we are sure to see the resurgence of the sectors that have been hardest hit – such as hospitality – with pent-up demand from lockdown playing a key role in boosting the economy later this year.
People want to get out and spend, businesses want to grow and investors want to help them do that, it’s a perfect storm for rapid growth.
Image credit: Hakan Nural