UK business confidence at lowest level since ‘mini-budget’: BCC

UK firms plan to raise prices to cover higher tax payments as confidence among businesses fell to its lowest level since the market. “mini-budget” crisis. of autumn 2022, according to a survey by the British Chambers of Commerce.

The trade group said sentiment had “declined significantly” in its the largest survey since the Labor government the first budget last Octoberwhich included an increase in the amount that many employers pay in National Insurance (NI), a tax on earnings.

The BCC said 63% of businesses cited tax as a concern in the survey, up from 48% in the third quarter. More than half (55%) said they expect prices to rise in the next three months, mainly due to higher labor costs.

The percentage of companies that said they expected turnover to increase over the next twelve months fell to 49%, from 56%. Concerns about inflation and interest rates he remained almost still.

The BCC cited companies in hospitality, manufacturing, construction and healthcare expressing concerns about how they would cover the additional costs and saying they would likely scale back investment.

“We recognize what [Reeves] she said, she’s going to raise taxes to fill her black hole, but what we need to see her do now is mitigate. What are we going to do to drive the economy?” ECB chief Shevaun Haviland told CNBC’s “Squawk Box Europe” on Monday.

“Companies should face this tax increase, but what we want to see them do is act, and they need to act quickly. It is important that they put strategies in place, industrial strategy, business strategy, infrastructure plan,” . for later this year, but we need to see action now.”

UK borrowing costs rose after the October 2024 budget, surpassing the levels that rose after the September 2022 “mini-budget”, which saw then prime minister Liz Truss. announce tax cuts at no cost.

However, economists say The recent rise in bond yields is not equivalent to the increase seen in 2022 as the movements have been significantly less dramatic and the macro background – including a cooling of inflation – has changed.