MORE HARM THAN GOOD?

Economic Outlook Roundtable: What Yorkshire’s Finance Leaders Are Saying About Growth, Hiring and the Road Ahead

Senior finance professionals from across Yorkshire recently joined Sharp Consultancy for an exclusive roundtable discussion featuring an economic update from Paul Mount, Economist and Deputy Agent at the Bank of England. The session provided a timely, in-depth look at the UK’s economic landscape — followed by a candid conversation about what businesses are experiencing on the ground.The picture that emerged was one of cautious realism. While official forecasts point to easing inflation and a gradual return to stability, many organisations across the region continue to navigate weak demand, rising labour costs, tightening legislation and stalled investment projects. Yet despite these pressures, there remains a strong sense of resilience and adaptability — qualities that have long defined the Yorkshire business community. At Sharp Consultancy, our specialist finance and accountancy teams speak daily to employers and professionals across commerce, industry, public practice and the not-for-profit sector. What we heard in this session closely aligns with the insight we gather from clients and candidates across the region. Below, we explore the key themes shaping business confidence, recruitment activity and the outlook for 2026. Inflation Is Easing, but Confidence Has Yet to Follow The Bank of England outlined its latest central forecast: Inflation expected to gradually return toward the 2% target. GDP growth set to remain modest but stable through 2026. Interest rates anticipated to settle around 3.5% based on market expectations. Unemployment projected to hold near 5%. However, the sentiment in the room was clear: despite improving headline numbers, confidence across most sectors remains fragile. Many organisations described the environment as “flat” — not contracting, but unable to capitalise fully on opportunities due to economic uncertainty. Sharp Consultancy continues to see this play out: businesses are stabilising rather than expanding, focusing on cash management, operational efficiency and carefully controlled hiring. Labour Costs Continue to Reshape Workforce Strategies Wage pressures were a recurring theme throughout the discussion. Employers highlighted: Significant increases to the National Living Wage. Higher employer National Insurance contributions. Expected future changes to minimum wage equalisation for younger workers. Rising cost and complexity associated with apprenticeships. These factors are pushing up costs at every level of the workforce and reshaping recruitment behaviours. Across Sharp Consultancy’s accountancy and finance divisions, we are seeing: Strong demand for replacement hires where roles are business critical. Lower volumes of growth hires, particularly in commercial and project-focused appointments. Clients increasingly prioritising candidates who bring breadth, adaptability and long-term value. Construction & Infrastructure: Capacity Under Pressure Leaders from the construction sector painted a challenging picture — one mirrored by many Sharp Consultancy clients operating across the wider built environment. Key themes included: Planning delays of 9–10 months, particularly related to the Building Safety Act. Businesses holding on to workforce capacity despite reduced margins — a strategy that may not be sustainable in 2026. Difficulty justifying new capital expenditure under IFRS when future cashflows are uncertain. Concerns that smaller subcontractors may not withstand prolonged delays or reduced demand.Yet, attendees also highlighted that construction could become a catalyst for economic recovery — provided policy reform and planning improvements unlock stalled projects. Manufacturing: Rising Costs and Shifting OperationsLeaders representing manufacturing shared concerns around: Rising energy and operational costs. Increased frequency of site closures and offshoring. Significant challenges in attracting engineering and technical talent. Early signs of contraction in several sub-sectors, with aerospace a notable exception. These pressures reinforce the growing importance of finance leaders who can model scenarios, manage volatility and guide long-term planning — roles Sharp Consultancy continues to support across the manufacturing landscape. Charity & Public Sector Organisations Facing Acute Strain For organisations reliant on local authority funding, the challenges are particularly stark. Attendees reported: Government and council funding caps. Rising NI, wage costs and VAT changes adding millions to annual budgets. Increasingly complex consultation requirements under forthcoming employment legislation. The likelihood of significant cuts to the frontline services in the months ahead.Sharp Consultancy’s continues to work closely with organisations navigating these pressures, supporting clients through restructuring, recruitment challenges and financial planning needs. Recruitment Outlook: Stability Over Expansion Across sectors, the message was consistent: 2026 is expected to be cautious, steady and focused on maintaining capability rather than expanding headcount. Attendees forecast: Workforce levels remaining broadly flat. Hiring driven by essential replacement roles. Transformation, M&A and large-scale project hiring likely to remain subdued. Improved recruitment confidence only once interest rates and policy direction stabilise. For employers, this means sharper competition for high-quality finance talent — an area where Sharp Consultancy’s specialist teams continue to provide targeted, market-led support. What Comes Next? A Slow but Steady Rebuild Despite the challenges discussed, the roundtable ended on a constructive note. Many leaders believe that once interest rates settle and stalled investment begins to move, the region could see a more meaningful upturn — potentially from 2026 onwards. Yorkshire businesses have proven time and again that they are resourceful, resilient and ready to adapt. Sharp Consultancy remains committed to supporting them through every stage — whether stabilising teams, recruiting future leaders, or navigating the next phase of growth. If you’d like to understand what these economic trends mean for your business or team, speak to our specialist consultants for a confidential market discussion. Contacts Us

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Those of you that are regular readers of my articles will know that their content is often inspired by something I have recently read or an exchange that has taken place which I’ve been mulling over in my mind for several days afterwards. That was very much the case again, however thanks to a timely phone call from a long-term business associate, you have been spared a tale involving a white shirt, laundry day and a rather unflattering revelation – which I’m not yet quite over - from my wife.

During one of our regular catch ups, my client and I commented that we had both recently read the same article with some interest. The headline – and I paraphrase at this point – claimed that Yorkshire had seen 25 per cent fewer insolvencies in 2020 when compared to 2019. And whilst, at almost any other time, fewer companies going out of business year on year would generally be welcomed by many as a positive, we were both somewhat surprised, considering the year that was in question.

Let’s be under no illusions; 2020 was a year like no other and whilst some sectors found that lockdown restrictions offered them opportunities to grow there were many more that faced – and are still facing - countless struggles and uncertainty which will take months if not years to recover from. So how could it be the case that during the most unprecedented 12-month period for businesses ever, more somehow managed to survive when compared to the previous year?

Without wishing to get political, one of the suggestions that came from our conversation was that the Government support packages have done what they set out to achieve and – whilst not perfect, with many firms and individuals falling through the cracks- these were in the most part, widely available and quickly implemented, particularly if you consider the furlough scheme. But have they been too generous in some instances? Certainly if we were looking at the number of businesses that didn’t survive being on a par with the previous year – or even slightly higher – you could conclude that the support offered had been about right as the number of casualties showed no real differences and the equilibrium maintained.

However, and whilst I certainly don’t begrudge them their survival, are we potentially facing a situation where businesses have survived because of the support they have received and in any ‘normal’ year, when such packages would not have been in place, they would have found themselves without a future?

What would be the downside to this? Jobs have been protected and businesses have survived to see another day. But in doing so, does this hamper the ability of companies to recover overall?

Take any ‘normal’ year, not all businesses survive, and the stronger operations would move into the space they vacate and take advantage of the resulting opportunities in order to grow and invest. Jobs are created, expansion takes place and so on and so forth. However, what we could now see is an artificially false competition – businesses which in any other year would not have survived, have been given a reprieve and are now fighting for their lives and, in doing so, may potentially be prepared to lower their costs way below the rest of the market making the route to recovery for a far greater number of operations a much more drawn out and difficult journey to travel.

As we tentatively ease our way out of lockdown, hopefully for the final time, it remains to be seen if the support that has been so heavily invested – currently to the tune of upwards of £280billion and counting – has indeed ensured the country can recover as quickly and as painlessly as possible or if, for some, it has simply delayed the inevitable and once that support is withdrawn, they find they are unable to survive. The question remains, will their prolonged existence have far reaching consequences for companies on the next rung up the survival ladder from which they may struggle to overcome?

Sharp Consultancy specialises in the recruitment and executive search of finance and accountancy professionals. With offices in Leeds and Sheffield our highly experienced team of consultants recruit for temporary, interim and permanent roles across the full spectrum of positions throughout Yorkshire and beyond. CONTACT US today and speak to a member of our team about your recruitment needs or next career move.