The global business environment continues to evolve. Billed as the ‘super year’ for elections, 2024 has seen billions of people around the world go to the polls, resulting in some significant shifts to the political landscape – including a change of government in the UK, and the recent re-election of Donald Trump in the US. At the same time, companies are having to navigate everything from shifting interest rate expectations to a challenging geopolitical landscape. Against this backdrop, what will companies need to consider as 2025 approaches?

1. Expect the unexpected

Since the beginning of the decade, businesses have been faced with numerous sources of disruption, from the Covid pandemic to geopolitical conflicts. Given the lessons of recent years, it’s clear that businesses need to be prepared for any eventuality in 2025, from escalating tensions to new trade tariffs.

David Stebbings, Head of Treasury Advisory & Pension Trustee at PwC, says that first and foremost, treasurers will be focusing on the impact of uncertainty and volatility, and the importance of being prepared for any extreme events that might occur.

Companies using derivatives will need to gauge the implications of unexpected events from a collateral point of view. “And even for other companies, things can happen quickly,” says Stebbings. “It’s important to know what your strategy is, whether you have enough cash available, and whether you have sufficient backup facilities in place.”

2. Address cost constraints

While there may be opportunities to gain efficiencies through technology, getting approval for new implementations can be more difficult when budgets are tight. “If you want to do anything – whether that’s develop your team or implement a new technology system – you need to have a good business reason to do it,” Stebbings comments. “That isn’t new in itself, but with budgets overstretched it’s perhaps more of a challenge than it was a couple of years ago.”

3. Monitor the interest rate environment

Meanwhile, interest rates continue to be an evolving topic. While recent months have seen central banks in the US, UK and Europe begin their expected rate cutting cycles, there is some uncertainty over the timings of future rate cuts. In the US, stronger economic and inflation figures – together with the uncertainty prompted by Trump’s election victory – have reduced expectations of a rate reduction in December. The Bank of England, meanwhile, indicated after the November rate cut that subsequent cuts are likely to be gradual.

A recent Treasury Today article explored the impact of the current rate environment on money market funds. Where debt is concerned, meanwhile, Stebbings notes that many companies have debt they refinanced during or after Covid. “But that’s now coming up to be refinanced, and if interest rates don’t come down as quickly as was anticipated, what are the implications of that for businesses in terms of managing their interest rate exposure?”

4. Navigate challenging markets

A further consideration for 2025 is the impact of additional sanctions on companies that do business in more challenging countries. “That’s always been an issue,” says Stebbings. “But with more countries being sanctioned, it can be more difficult to carry out legitimate business in some of these countries, particularly as banks are becoming more risk averse.”

5. Harness opportunities

Finally, while there are many challenges to consider in the year ahead, Stebbings emphasises the importance of taking advantage of opportunities as and when they arise. “It’s an interesting time to be a treasurer,” he concludes. “There’s more uncertainty in the world, but there are also plenty of opportunities to be had. So, expect the unexpected, but be ready to take advantage of the opportunities too.”