Post-pandemic spending boom to give high street boost, says Cornerstone Tax

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As the economy opens up, business is expected to boom. Subsequently, spending by UK businesses is set to surge as finance directors prepare for a sharp increase in hiring and investment, according to a new survey by Deloitte. Almost three-quarters of chief financial officers expect rises in capital expenditure, while 76% forecast increases in hiring in the year ahead.
 
This internal investment by businesses is being matched by injections of capital into our highstreets by external and international sources, as international equity into smaller UK businesses grew by 9% last year, according to the British Business Bank. The total of £8.8bn is the highest recorded since the bank started tracking the data ten years ago. 

This new business optimism should be felt throughout more of the often-neglected or under-developed areas of the UK, as the data from property experts Cornerstone Tax show that a significant amount of people have moved away from cities, and into the countryside. 

  • In the past year, 3.32 million Brits have moved away from a city or urban area (3,319,000) 
  • 58% of Brits plan to shop more at their local high street when it reopens (27,740,000) 

This has been reflected in the uneven distribution of property demand. House prices in regions such as the North West have risen dramatically, showing a demand and therefore hinting at an influx of people moving away from major cities into these rural areas. This will likely aid the Government’s ‘levelling-up’ agenda, as more workers, spenders and savers are distributed more evenly throughout the UK. 

David Hannah, principal consultant at Cornerstone Tax, discusses this confidence, and what it means for the ‘levelling-up’ agenda: “The year has been a challenging one, however, things are starting to look up as we approach opening up the final remnants of lockdown. This momentum has been building on all sides of the business world. We are now in a position where households are spending more on the highstreet, businesses are investing more in their operations, and capital is being investing into them at greater volumes. Businesses then hire more people, and so the cycle continues.
 
“This is of course fantastic news, but what makes it slightly sweeter to some of the more regional areas of the UK is that this confidence will be brought to their high streets too. This should aid the Government’s levelling-up agenda greatly.”