Reduction in Spending and Tightening of Belts in 2017 are all Signs of a Good Contra Deal Opportunity
Understanding what’s going to happen to the economy over the next year is always a tricky business, but one which can be incredibly rewarding if correctly judged. Predicting how the nation’s economy will shift and how this will affect your business’s day to day trading puts you ahead of the curve, and lets you take advantage of every opportunity which comes your way.
So why will contra deals become ever more important to the marketplace during 2017? There are several key indicators which point to a reduction in spending, an overall tightening of belts and purse strings. Because contra dealing allows you to operate free from the constraints of your cash flow, businesses which keep a keen eye on contra deal opportunities stand to benefit substantially.
Likely Increase in Inflation
A weak pound is beginning to make itself felt, and the Bank of England recently released a statement predicting that inflation will rise to more than 2% in 2017. Since the Bank’s target inflation rate is 2%, they’ll be forced to counter this by raising interest rates, making it more expensive to borrow money. The more expensive borrowing is, the more you stand to save by contra dealing.
Lower Real Wages
Inflation is likely to increase, whilst wages struggle to keep pace. This is due to the after-effects of the financial crash, with the UK economy still struggling to recover even years later. With less money in their pockets, people are less likely to take out loans or even to spend at all – a good time to be contra dealing rather than relying on cash.
Ease of Contra Dealing
Besides contra dealing becoming a more attractive alternative to borrowing, it’s also becoming ever more convenient. The more people you have access to, the more likely you are to find the perfect deal for you, and with the advent of digital marketplaces it’s become easier than ever to arrange a contra deal that solves your particular problems.
Contra Dealing in 2017
Of course, we can never predict with certainty what will happen in the economy. The best guesses of the Bank of England and many economic pundits point to a general downturn in spending and a higher cost of borrowing, but the specific details could easily change. However, all the signs point towards contra-dealing being an ever more important tool in the small business owner’s toolbox.