The Johnson/Truss debacle of 2022 made people more afraid of starting businesses – new findings
Authored by Mark Hart and Sreevas Sahasranamam to coincide with the release of the GEM UK Report 2022 /23 a new Insight piece in the Conversation was published on June 29th 2023.
The UK picked a bad year to have a political crisis in 2022. The markets were already jittery because the global economy was struggling to recover from COVID. The war in Ukraine drove up energy costs, leading to high inflation and a cost of living crisis in many developed economies. In the UK, these pressures had combined with the effects of Brexit to sharply raise the cost of doing business. Then, in early July, Boris Johnson was forced to resign as prime minister, ushering Liz Truss into office. Her administration’s inaugural budget in September led to an economic shock as markets gave their judgement overnight. On the back of this, business confidence collapsed.
As for the period since the end of our 2022 survey, the rate of entrepreneurial activity may well have further declined. This would make sense in view of the continuing cost of living crisis, with its combination of sticky inflation and rapid rises in interest rates. Until more people feel like starting businesses again, the downturn is probably grinding on – with an unhelpful push in the wrong direction from the government.
