Barclays CEO “very optimistic” about UK economy

Barclays CEO C.S. Venkatakrishnan said he feels “very optimistic” about the outlook for the UK economy, despite the rising cost of living.

Speaking to CNBC at the World Economic Forum, Venkatakrishnan told a crowd of investors and financial experts: “I think the UK consumer is in very decent shape.”

His comments follow a report by Startups.co.uk, which found that more than 9 out of 10 small business owners in the UK feel positively about 2024.

In a survey of 546 UK small businesses, 92% of respondents said they feel optimistic about their growth prospects for 2024, with 59% reporting high levels of optimism.

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2023 was a year to forget for small businesses. Record high energy bills, a painful hiring crisis and skyrocketing inflation combined to sound a death knell for businesses across every industry.

As a result, Startups’ survey found that SMEs still standing at the end of 2023 are more likely to say they survived (51%) rather than thrived (42%) last year.

Speaking at the Davos conference, Venkatakrishnan acknowledged the difficulties, “these pent-up savings have been getting eroded”.

However, he remained bullish about the likelihood of economic recovery his year, adding that energy prices have “calmed down” and predicting that mortgage rates would follow due to market adjustment – both areas that would encourage more consumer spending.

“Two things that have hit the pocket book are coming down, and I will say I’m very optimistic about the UK,” he added.

Some sectors happier than others

The business outlook for 2024 differs depending on the sector, however. Startups’ survey showed that, while 68% of firms in finance and tech are highly optimistic, 20% of those in leisure, hospitality, and retail are pessimistic.

Labour shortages and decreased consumer spending helped to worsen an already catastrophic hospitality crisis last year.

Retail, Hospitality, and Leisure (RHL) relief, a discount scheme for shop, bar, and restaurant business rates, was recently extended in the Autumn Statement.

Many will cling to this meagre life ring in 2024. Startups recently reported that 19% of hospitality companies are unable to raise pay this year. Big-name employers, such as Brewdog, have already faced criticism for not raising wages to the new Real Living Wage bracket.

New startups most confident

In further good news for the UK’s economic outlook, the businesses that were most likely to express positive sentiments about the future were those founded in the past two years.

74% of those founded in the past year are optimistic about 2024, versus just 47% of companies that launched in 2019, a year marred by the start of the COVID-19 pandemic.

It’s easy to think of a downturn as all doom-and-gloom. But often, scarcity can breed clarity. Plenty of successful companies have been founded during a recession including unicorns Airbnb and Uber.

That nearly three out of four startups feel ready for scale-up this year is a good omen for the UK’s economic recovery in 2024.