UK businesses face a cocktail of political risks says John Cridland CBE director-general of the CBI

The CBI hosted an afternoon briefing for its trade association membership with John Cridland, director-general of the organisation. He presented his view on the current economic climate and the possible risks to the business community in the future.

Overall, Cridland was positive about the UK economy, he thought it had strong organic growth, but the pace of growth was slowing as the global economy was slowing down. The UK has finally moved out of recovery mode and is growing, this view was echoed by entrepreneurs up and down the country, he said.

The defining issue today is no longer the recovery but the politics and the economics. Cridland spoke about a “cocktail of political risks”, which taken on their own could be dealt with but as a whole are altogether more difficult to deal with.

A risk to business is the fragmentation of the UK’s political system. From our industry perspective a particular risk to data-driven businesses is that during the final negotiations over the General Data Protection Regulation in the EU the UK could be without a government and in coalition negotiations.

Moving on to economic risks, Cridland felt that the Eurozone presented the most immediate threat to the UK economy. As the UK’s largest trading partner, the vitality of the UK economy was inextricably linked to the Eurozone countries. The main problem for the Eurozone states was a lack of competiveness. Moreover, the two largest states, Germany and France, both had key reforms to make to push the Eurozone towards growth. Germany needs to boost investment significantly, while France needs to implement major structural reforms to its labour market.

UK businesses need to be prepared for a more unstable political future at home and a cooling global economy. The positive news is that the UK economy is growing based on solid foundations and wages are beginning to pick up for ordinary workers.