UK firms expecting slowdown

UK firms are expect­ing to reduce both out­put and hir­ing this quar­ter, accord­ing to a sur­vey con­duct­ed by the Con­fed­er­a­tion of British Indus­try (CBI).

Activ­i­ty has been flat or falling since the mid­dle of 2022, reflect­ing a pro­longed peri­od of stag­na­tion.

The sur­vey sug­gest­ed that sen­ti­ment among busi­ness­es dipped in the after­math of the Gov­ern­men­t’s Autumn Bud­get.

Some busi­ness­es said that the tax ris­es had result­ed in them review­ing their bud­gets at short notice and tak­ing steps to mit­i­gate high­er costs.

Plans include rais­ing prices to pass on addi­tion­al costs to clients, trim­ming invest­ment plans and cut­ting staff to reduce busi­ness expens­es.

Alpesh Pale­ja, Inter­im Deputy Chief Econ­o­mist at the CBI, said:

‘After a grim lead-up to Christ­mas, the New Year has­n’t brought any sense of renew­al, with busi­ness­es still expect­ing a sig­nif­i­cant fall in activ­i­ty. Along­side plans to cut staff and raise prices fur­ther, this risks an increas­ing­ly awk­ward trade-off for pol­i­cy­mak­ers.

‘Anec­dotes sug­gest that com­pa­nies are being hit by lack­lus­tre demand and cau­tion among con­sumers, while also con­tin­u­ing to adjust to mea­sures announced in the Bud­get.

‘There is an urgent need to get momen­tum back into the econ­o­my. The gov­ern­ment can help shift the UK’s eco­nom­ic nar­ra­tive with more deter­mined focus on mea­sures that could dri­ve growth.’

Inter­net link: CBI