The role of specialist banks in supporting SME productivity
Stuart Hulme, director of savings and marketing at Hampshire Trust Bank | 07:27 Wednesday 30th May 2018
While UK productivity levels ticked up slightly in the second half of 2017, the solution to the productivity puzzle is still eluding policymakers.
With Brexit looming ever closer, unlocking small- and medium-sized enterprise (SME) productivity potential is key to ensuring continued economic growth and we believe specialist banks have a crucial role to play.
According to figures from the Office of National Statistics (ONS), UK labour productivity was estimated to have grown by 0.7% from Q3 2017 to Q4 2017, the second consecutive quarter of growth. However, according to the ONS, productivity in the UK is lower than all other G7 nations apart from Japan and Canada.
The good news is that UK SMEs are thriving. According to government data, 1,100 businesses start every day in Britain and the UK is ranked as one of the best places in the world to start and grow a business. In addition, our SME Growth Watch research shows that smaller businesses are forecast to grow their economic contribution significantly over the longer term.
However, if the UK is to be prosperous as we move away from the European Union and SMEs are to fulfil their potential, we need the government to keep the spotlight on smaller companies by creating conditions in which they can continue to thrive and grow and by tackling issues such as productivity head on.
So what is being done and how can specialist banks help?
Well, in a bid to solve this puzzle, earlier this month the government launched a review focused on helping to improve the productivity and growth of UK SMEs. As a specialist bank focused on supporting smaller businesses, we await the outcome of this consultation with interest.
What can specialist banks do to support SME productivity? Well, it may sound simple, but in order to drive economic growth, specialist banks must keep on lending to businesses in their chosen sectors. In addition, we must continue to provide competitive business savings accounts that can help firms invest in the future.
As a specialist bank, we lend expertise as well as money. We employ specialists that truly understand the markets in which we operate and take time to build long-term business relationships with our brokers and customers. We believe this people-first, personalised approach is vital in providing SMEs with the support they need to grow and in helping to solve the productivity problem once and for all.
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