Ongoing uncertainty both at home and abroad are causing UK businesses to sit on cash surpluses, according to a new survey from the Institute of Chartered Accountants in England and Wales.
ICAEW’s director of business Stephen Ibbotson said: “The results suggest that businesses have learnt their lessons from the 2007 financial crisis. We have seen business investment slow down, and firms are now sitting on their cash and waiting for the right opportunity. And those who are looking to invest are doing so in their staff to retain them, rather than on plant and machinery. “This should be commended – businesses are getting their houses in order. But we don’t want to see firms just battening down the hatches, which could stop our recovery in its tracks.”
The key findings in the survey are:
62% of businesses have a cash surplus this year;
69% believe that they are likely to have one next year;
36% of firms have started investing their surplus;
38% are neither considering nor starting to invest.