With prime minister Rishi Sunak announcing a UK general election in July, new research highlights how bosses of small- and medium-sized enterprises feel about a potential change of government, as well as other business-impacting issues.

According to findings from Shawbrook, the savings and lendings bank, the majority (51%) of SME leaders are apprehensive over a potential change of government. Just one percent fewer (50%) cite political uncertainty as a major concern.

Relatedly, another top issue—cited by 73% of bosses—is rising costs. In Shawbrook’s prior research from 2023, this figure was 68%, highlighting that the problem has intensified over the last year. Just over a quarter (26%) also say they’re very concerned about the costs involved with running their business.

Underpinning rising costs is the cost-of-living crisis, rising interest rates, and supply chain disruptions. Shawbook’s research uncovered that 69% of respondents are concerned about the cost of living in particular in the next 12 months, with 66% feeling worried about economic uncertainty.

When it comes to interest rates and supply chain disruptions, 67% and 57% of respondents respectively are concerned. Debt repayments and the costs of bills also remain on the minds of bosses.

Whether a potential change in government would alleviate or deepen these problems is yet to be seen.

“By July 5th, we will have a definitive outcome that will shape the direction of our government for the next four years,” said Neil Rudge, head of enterprise at Shawbrook, on the upcoming general election.

“Naturally, this period of transition can cause some apprehension within the business community. Incoming administrations often usher in new policies, regulations, and tax structures, which can disrupt established business plans and make future forecasting challenging, particularly for SMEs.

“It’s important that political parties prioritise the dissemination of clear and detailed information regarding potential policies that may impact SMEs,” he added. “Ambiguity in such matters can significantly hinder businesses’ ability to prepare for potential changes.”

Recommended reading

• Elon Musk Launches New Artificial Intelligence Startup, xAI
• New ‘Grok’ AI Will Glean X for Real-time Information
• Leading AI Firms Commit to New Safety Standards at Seoul Summit

“However, there are positive signs to consider. We are encouraged by the cautious optimism already evident amongst SMEs, reflected in the recent increase in funding applications.

“This positive sentiment, coupled with falling inflation and the anticipation of an interest rate reduction, suggests a potentially interesting second half of the year for the economy.”