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    Tag: economic outlook

    PM+M’s Stephen Robinson: Cautious optimism for North West dealmakers

    Posted on by Rebecca Campbell

    The UK economy continues to present a mixed picture. Overall growth remains subdued, but this headline view masks significant variation across sectors and regions. For owner-managed businesses in the North West, this divergence is particularly important, as many locally owned companies continue to perform well despite wider economic uncertainty.

    Across manufacturing, professional services, technology and healthcare – all sectors with a strong North West footprint – many owner-managed businesses have proven resilient. Management teams have responded to rising costs and softer demand by tightening operations, investing selectively and focusing on sustainable profitability. As a result, many businesses are in better shape than might be assumed from the broader economic narrative, which is helping to underpin confidence in the regional deals market.

    Looking ahead, I expect M&A activity in the North West to build steadily over the next 12 months. For many owner-managers, the last two years have been characterised by caution. Political uncertainty, inflation and rapidly rising interest rates led some to defer exit plans, succession strategies or growth-by-acquisition ambitions. In particular, nervousness following the last two UK Budgets created hesitation around valuations, tax outcomes and future cash flows. However, I am seeing that nervousness is now beginning to ease.

    While uncertainty has not disappeared altogether, business owners are becoming more comfortable with the current environment. Buyers and sellers are increasingly aligned on price expectations, and there is greater realism around deal structures, including earn-outs and deferred consideration. As a result, confidence is gradually returning, supporting a more active M&A pipeline.

    Interest rates, of course, remain a central consideration for owner-managed deals, particularly where funding is required for leveraged transactions or bolt-on acquisitions. Recent reductions have been modest, but they have helped improve sentiment and, importantly, provided greater clarity on the likely direction of travel. This stability allows owners to plan transactions with more confidence, even if rates remain higher than historic lows.

    My feeling is that funding costs will decline slightly over the coming months, marginally improving the viability of deals that may previously have struggled to stack up. In the owner-managed market, where transactions are often more sensitive to cash flow and debt service, even small reductions in interest rates can materially improve affordability and lender appetite.

    The funding environment is also showing signs of gradual improvement more generally. Lower borrowing costs may encourage owners to revisit acquisitions, refinancings or succession solutions that were paused during the period of heightened uncertainty. While lenders remain cautious, there is increasing support for well-prepared businesses with strong management teams, robust financial information and a clear strategic rationale.

    Crucially, small improvements in capital availability can make a significant difference to transactions at the margins. For owner-managers considering an exit, a partial sale, or a transition to the next generation, this shift could open up options that were previously unavailable.

    Overall, while the economic backdrop remains challenging, the outlook for corporate finance and deal activity in the North West is increasingly positive for owner-managed businesses. Confidence is rebuilding, funding conditions are becoming more supportive, and high-quality businesses continue to attract interest. For owners considering a transaction in the next one to three years, now is an opportune time to review options, prepare early and seek advice to ensure they are well positioned when market conditions align.

     

    Market update: what’s happening and what it means for you

    Posted on by Rebecca Campbell

    As the summer months rolled in, global financial markets seemed to take a breather from the drama of trade tensions and political headlines. Instead, investors shifted their focus back to the basics: how companies are performing, how economies are growing, and the ongoing excitement around artificial intelligence (AI).

    Economic overview: mixed signals across the globe

    While most regions saw little change in economic growth, the United States raised some eyebrows. A major revision to job data revealed fewer new jobs than previously thought, and economic activity slowed during the summer. This led to increased concern about the health of the US economy.

    The US dollar, which had been weakening throughout 2025, found some stability during the quarter. It even regained some ground against the British pound, which is important for UK investors with exposure to US assets.

    Inflation: a growing concern

    Inflation (how fast prices are rising) is becoming a bigger issue, especially in the UK. We’ve been watching this closely, and now it’s clear that inflation could reach double the Bank of England’s target before the end of the year. That means everyday costs could continue to rise, affecting everything from groceries to housing.

    In the US, inflation is also creeping up. However, many companies are choosing to absorb these higher costs themselves rather than pass them on to consumers, likely due to uncertainty about the economy.

    Bond markets react

    Bond markets, which often signal investor expectations about inflation and interest rates, responded to these concerns. Yields on longer-term bonds rose in many countries, reflecting uncertainty about future inflation. In the UK and US, government spending plans added another layer of complexity.

    In the US, the Federal Reserve (America’s central bank) responded to weaker job numbers by cutting interest rates in September, a move aimed at managing risk and supporting the economy. However, not all Fed officials agreed on the path forward, with some suggesting rates should fall below 3% by year-end.

    Back in the UK, the Bank of England faces a tough balancing act. Inflation is proving stubborn, especially in areas like housing and services, making it harder to decide whether to raise or lower interest rates. This uncertainty caused the UK bond market to shift slightly, as investors tried to make sense of the situation.

    Stock markets: AI and emerging markets shine

    Global stock markets saw a shift in leadership this quarter. The US continued to perform well, driven by enthusiasm around AI and related investments. But it wasn’t the only star.

    China stood out, with its tech sector attracting investors thanks to lower valuations compared to the US. Taiwan and South Korea also delivered strong returns, although India’s stock market lagged behind.

    Closer to home, UK and European markets made gains, especially among larger companies. Japan’s market also picked up, helped by a new trade deal with the US and strong company fundamentals, including widespread share buybacks.

    Looking ahead: what should investors expect?

    The more positive mood over the summer has pushed many stock markets into double-digit returns for the year so far. However, UK investors with overseas holdings may have seen some of those gains reduced due to the weaker pound.

    There’s an interesting contrast between stock and bond markets, especially in the US. While bond investors are worried about slowing economic growth, stock investors remain optimistic, focusing on AI innovation and increased merger and acquisition activity.

    Bond markets often spot trouble before stock markets do, but they can also overreact. In the UK, bond investors are more focused on inflation and how it might be controlled without hurting the economy.

    As we head toward the end of the year, expect more headlines about inflation, interest rates, and economic growth. But remember: not all noise is worth reacting to. Staying focused on long-term goals and maintaining a well-diversified portfolio is often the best approach.

    Get in touch

    If you would like to discuss your investments in more detail, or require tailored advice specific to your situation, please get in touch by emailing financialplanning@pmm.co.uk or by calling 01254 679131.

    The value of investments can fall as well as rise. You may not get back what you invest.

    The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction.

    North West SMEs show the kind of resilience the UK economy needs

    Posted on by Rebecca Campbell

    Britain’s economic outlook remains clouded by a complex mix of pressures — tariffs, global instability, bond market turbulence, and stubborn inflation. It’s an environment in which uncertainty often overshadows opportunity, and national headlines tend to reinforce a narrative of caution, if not paralysis. Yet look more closely — particularly at the UK’s regional economies — and a more nuanced picture emerges.

    Here in the North West, there is a growing sense that, while conditions remain challenging, many SMEs are quietly adapting and, in some cases, performing remarkably well. It’s not optimism for optimism’s sake, but a pragmatic focus on the fundamentals that drive resilience: cash flow, people, productivity, and long-term planning.

    At PM+M, we advise a broad range of SMEs across the region — from specialist manufacturers and professional service providers to scale-ups and longstanding family-run businesses. Most are navigating the same headwinds as their counterparts elsewhere in the UK: rising wage bills, tax complexity, and shifting consumer patterns. But what I believe stands out is their decisiveness.

    Rather than waiting for perfect conditions, these firms are adjusting their strategies. They’re investing in new technology to drive efficiency, taking a closer look at workforce planning, and — crucially — focusing on what they can control. In an age where speculation dominates headlines, that level-headedness is crucial.

    However, this should not be mistaken for complacency. Leaders in the North West are fully aware of the risks. But they are also grounded in the realities of day-to-day business: the need to meet payroll, manage margins, and make operational decisions in real time. They do not have the luxury of apathy — and that gives them an edge.

    SMEs are vital to the health of the UK economy. In regions like the North West, they are not just participants — they are the very foundation. Their decisions impact local supply chains, job markets, and innovation. It’s precisely because of this influence that government policy must better reflect the role of regional SMEs more directly. The £70bn infrastructure programme outlined by the government has the potential to be a catalyst, but only if it’s delivered with clarity, consistency and coordinated regional alignment.

    But that opportunity will only be realised if businesses can plan around it with confidence. One recurring message I hear from clients is: “Tell us what’s coming — and we’ll plan accordingly.” That desire for clarity is not about avoiding risk, but about managing it responsibly. When policies shift with little notice, or incentives are introduced only to be withdrawn months later, it undermines the planning SMEs rely on to make smart decisions and achieve better outcomes.

    If regional SMEs are expected to help drive national recovery, then policy must be steady, strategic and crucially rooted in local realities. Centralised, one-size-fits-all thinking rarely works for businesses whose concerns are shaped by local workforces and regional infrastructure.

    We should also recognise the influence of these firms. Many are owner-managed, community-embedded, and inherently agile. Their decision-making is faster, more responsive, and more accountable than that of large corporates. In volatile conditions, this agility is a competitive advantage — and one the UK should harness.

    The story in the North West is not one of unchecked growth or bulletproof confidence. It is one of resilience, resourcefulness, and realism. These businesses are not waiting for certainty; they’re working with what they’ve got — and doing it well. Now, they need the right environment to go further.

    That means stable policy, place-based support, and recognition that the road to economic recovery does not run solely through London, but through the regions — powered by the SMEs that have always formed the bedrock of the British economy.