News
Danny McCance 26 Sep 2017 02:41pm

Cash a concern among UK businesses

Two-thirds of UK businesses have a cash surplus this year, the same for the last four years, and more than a quarter expect this to increase in over the next twelve months

According to an ICAEW survey, 37% of UK business have not invested or considered investing their cash surplus over the next 12 months

Respondents cited the need for flexibility (49%), uncertainty (32%) and lack of opportunity (30%) as reasons for not investing.

“Businesses are in no rush to make major capital investments at the moment and this is reflected in the amount of cash they are hoarding,” ICAEW chief executive Michael Izza said.

“But businesses should be investing now for the future and not for austerity.

“Without this investment, growth will continue to slow, especially as we can no longer rely on consumers to keep spending at the rate they were,” he added.

Among those using cash surplus, 68% were reinvesting in IT infrastructure, 58% in training and development and 54% on new technology.

In a separate report, Lloyds Bank claimed UK businesses had £535bn tied in excess working capital, up 7% from £498bn since the latest May report.

This was due to sustained economic growth and a fall in sterling, which put pressure on businesses and increased the required amount for working capital.

The report also suggested as many as one in three businesses were worried about economic uncertainty or the fall in sales over the following 12 months.

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