It has been a while since our last blog. The team at CMF Capital has been busy, with record funding levels and record numbers of deals closed across our last financial year. We are also working to strengthen our position as a leading independent asset funder in Europe. A strategy that can deliver in any industry sector and regardless of how the Brexit muddle unfolds. Expect more announcements in the near future. Anyway, onto the budget.

This week Philip Hammond, laid out his plans for the future of the UK economy in the Autumn Budget 2017 with construction and technology sectors the two clear winners. With Brexit, the deficit and public services and welfare all under the microscope, the chancellor aimed to deliver a balanced budget to prepare the UK to tackle the challenges of Brexit head-on.

As he jabbed and prodded at the Labour party over inherited economic problems, while offering a chance to reduce borrowing his budget also came with a handful of important handouts. It was also tempered with a healthy dose of conservative realism. In 2015, George Osborne had forecast a budget surplus of £10bn by 2019. That has now been revised to a £20bn deficit.

However, the biggest takeaway from the budget was the slashed forecast in growth. The OBR growth forecast for 2017 was reduced retrospectively from two per cent to 1.5 per cent, with GDP reduced to 1.4 per cent, 1.3 per cent and 1.5 per cent in subsequent years before rising to 1.6 per cent in 2021-22. With Asian, US and European economies all motoring ahead, the UK’s productivity riddle still leaves us stuck in the slow lane – even with £400m of new electric car charging points.

Productivity growth and business investment also revised down from previous estimates. On a slightly brighter note, another 600,000 people are set to be in work by 2020 to help contribute to the economy. There was also a £1.7bn ‘Transforming Investment Fund’ designed to keep powering northern and midlands business engines.

With the cloud of Brexit hanging over us, it is worrying to see the reduced productivity and growth forecasts have lowered, this a clear indication of economic uncertainty caused by our decision to leave the EU. Brexit has split the country and it is splitting the conservative party. When ministers aren’t being sacked for inappropriate sexual behaviour or arranging secret meetings with Israeli heads of state they are floundering around and bickering about how to handle negotiations in Brussels.

Technology was a large part of the Budget, with the chancellor announcing a £500m fund that will drive forwards initiatives responsible for fortifying the UK’s digital economy. As such, the effort to boost digital skills and how to use artificial intelligence should be welcomed.

There’s been a lot of uncertainty around what would replace the European Investment Fund. With the promise of a new £2.5 billion investment kitty, the government is seeking to help the UK’s scale up companies, bridge the funding gap and help them grow into the next technology unicorns.

Whether businesses like it or not, artificial intelligence and robotics have increased the demand for tomorrow’s workers to understand emerging technologies. SME’s read about an array of new technologies on the horizon and their need to invest. However, the reality is operating margins remain tight, sterling’s drop remains a double edge sword and there is no guarantee of a trade or customs deal with Europe. Any investment in the short term will likely focus on plant, machinery, extending premises or recruitment.

From robotics to AI or autonomous cars, businesses need to understand how these technologies work and could benefit productivity or drive efficiencies.

The Open University’s Business Barometer issued statistics in July, highlighted that the UK’s skills gap was costing organisations over £2bn a year. Starting at schools, new investment to make us more numerate, to distance learning funding and a goal of delivering 3 million apprenticeships starts by 2020 should be applauded.

Apprentices are needed more than ever in our construction industry. The government has set itself a new target of building 300,000 new homes a year by the mid-2020s. And the chancellor has put small and medium-sized builders at the heart of ambitious plans to tackle the growing housing crisis. With £44bn of capital funding, loans and guarantees, he appears to be putting his money where his mouth is.

In particular, a further £1.5 billion for the Home Building Fund to be targeted specifically at SME housebuilders can play a significant role in channelling crucial funding to this sector. A £630 million fund to prepare small sites for development and proposals to require councils to deliver more new housing supply from faster-to-build smaller sites will provide opportunities to boost small scale development.

The major challenge to getting new homes built is the skills crisis we face. In the long run, the only real solution to chronic skills shortages will be a major increase in the training of new entrants into our industry. By committing an extra £34m of resource to training for construction skills Hammond has recognised this problem. But in the short-term builders need to be certain they can access skilled EU workers.

Whether the range of fiscal measures can increase productivity remains to be seen. There’s a feeling that we’re ‘going through the motions’, stuck in a rut, unclear on Brexit and uninspired by what the future has to hold.

The current political stage is worryingly devoid of vision and leadership. Business confidence is wavering, and Labour is still not a viable alternative. John McDonnell was asked nine times how he would finance Labour’s borrowing. Each time he dodged the answer, calling it a ‘trite form of journalism’.

We are now used to Jeremy Corbyn making wild, un-costed policy statements, from scrapping student debt, renationalising energy and rail. We laugh at Diane Abbott’s inability to pass a primary school maths exam, but the mess the Conservative party is in, still means Labour has a fair chance of government at the next election.

If Theresa May were to resign tomorrow, who would you want to take the reins? The talent within the current political cupboard resembles a Venezuelan supermarket shelf.

As usual, it will be down to business leaders to roll up their sleeves and take the country forward – at least beer duty was frozen.