What have those Italians done?

Here we are coming to the end of February and it seemed with Stock markets around the World on the up and no shocks to the financial systems confidence was increasing and output was increasing. It would take some time but it did look like the business world would come out of the other end of the recession………and then came the Italian elections to bring us back to reality…..

We have all woken this morning to stock markets falling and this shows the fragility of the present position. In Italy we have a position where no party has power and it looks like deals may have to be done between parties and a lengthy period of political deadlock. Italy even has Berlusconi back with some power within the country. The debate is around the austerity measures that Italy has taken to get itself out of its economic problems.  Some of the politicians in Italy are even suggesting a vote on if they stay in the Euro!

Business hates uncertainty and that is what we have now, just when we thought we could all see the light starting to appear at the end of the recession tunnel …….and of course we have the pound at a recent low against most currencies around the world. This will make all those goods imported from around the World that are priced in other currencies e.g. oil, more expensive in sterling terms and this will have an effect on inflation. This should be a bonus for exporters.

How does this all affect the small-business in the UK? It shows that all businesses need to be cautious and monitor sales and the financial position of the business regularly. I these times cash flow is critical to the business. It is imperative that any problems are anticipated before they happen.

For free advice on how you can improve the systems in your business contact Alan Todd at Cambridge Business Advisors.