By Claire West

Andrew Sentence a member of the monetary policy committee of the Bank of England spoke to business leaders in Exeter last week at the Devon and Cornwall Business Council and gave encouragement to entrepreneurs and business owners everywhere.

In his speech Dr Sentence, who is one of the nine members of the bank’s monetary policy committee, which meets each month to decide on UK interest rates, said:

“We need to remember that the recent period of stability in economic growth was preceded by a particularly volatile period for the UK economy — from the early 1970s through to the early 1990s — including three major recessions. Some commentators have begun to talk about a UK recession again, raising the spectre of a return to that era.
That would be a worrying prospect, and in my judgement an outright recession — in which economic activity falls year-on-year — is a remote risk for the UK economy at present. But we should expect to see a significant slowdown in growth.”

“Slowdown will be more noticeable in some sectors than others. Activities more dependent on the UK consumer and with strong links to property and financial markets may see a more marked change in demand. By contrast, UK manufacturing and other sectors more dependent on overseas markets will see an offsetting benefit from a more competitive pound and could also find that the strength of demand in emerging markets helps to soften the impact of slower global growth in the US and Europe.”

Businesses looking to emerging markets might want to consider attending one of the Fresh Business Thinking one-day events focusing on doing business in; China, India, Russia, UAE and South Africa – International Trade Week

If increasing sales is not an option then cost-cutting might be the right approach according to the National Federation of Enterprise Agencies (NFEA).

Chief executive of the NFEA George Derbyshire stated last week that should an economic slowdown take place then those managing small and medium-sized enterprises should examine their financial situation carefully.

He added that bosses should look at their costs rigorously, noting that it is easy for “a bit of fat to creep in during the good times”.

Nevertheless, Mr Derbyshire continued: “In most businesses, with the right attitude and a red pen, you can cut a fair amount out of your cost line.”