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The number of businesses planning to raise prices in the coming months jumped sharply as the UK budget boosted confidence in tax and wage costs, British Chambers of Commerce warned.
About 55 percent of companies said they planned to raise prices in the next three months, up from 39 percent in the third quarter, the lobby group’s survey of nearly 5,000 businesses found.
The expected price increase will exacerbate this concern Budget Measures will support the UK’s resilient inflation.
The alarming level of taxation has reached its highest level since 2017, the BCC found, following Chancellor Rachel Reeves’ decision to raise employers’ national insurance by £25 billion in October’s budget.
BCC chief executive Shevan Haviland said: “Business confidence has fallen into the pressure cooker of spending and tax. “Companies of all shapes and sizes are telling us that the rise in national insurance is particularly damaging.”
The government has gone under. Heavy fire From the Budget to Business, bosses are lamenting higher National Insurance rates for employers as well as a rise in the National Living Wage. Weakened confidence coincided with a weaker GDP reading, according to the Bank of England. Assumptions In the last quarter of 2024, despite a strong start to the year, the economy failed to grow.
Companies planning to raise prices were on par with levels seen in early 2023, when official inflation was still above 10 percent.
Rising labor costs were the biggest reason given by companies planning to raise prices, up from 75 percent of respondents in the third quarter, up from 66 percent in the third quarter. He also noted that the issue is of great importance in the hospitality sector, as well as in transport and logistics.
63 percent of businesses said that taxes, including national insurance, are a concern following the budget situation at the highest level since 2017. Confidence, meanwhile, has fallen to its lowest level since former Prime Minister Liz Truss’ mini. – In the autumn 2022 budget.
49 percent of respondents expect sales to increase over the next 12 months, down from 56 percent in the third quarter, due to lower confidence in retail and hospitality. Almost a quarter of companies say they have reduced investment plans, up from 18 percent in the third quarter, although 56 percent of their plans have not changed.
In the year At its last meeting in 2024, the Bank of England chose to keep borrowing costs at 4.75 percent, as the central bank continues to monitor the impact of fiscal inflation expectations. Inflation and wage increases have “increased the risk of continued inflation,” the majority of rate-seekers expressed concern.
The BOE warned that “most indicators have declined amid recent activity in the UK” and warned of “significant uncertainty over how the economy might respond to higher employment costs”.
The meeting followed the presentation. UK inflation rose to 2.6%. In November, from 2.3 percent in October.
The BCC survey was conducted between November 11 and December 9 and collected data from more than 4,800 businesses, more than 90 percent of which are small or medium-sized enterprises.
David Brayer, head of research at the BCC, said: “Our survey paints a difficult picture of rising prices and shows that businesses have some very tough decisions to make.”
“Many are telling us that they expect prices to rise and investment to decrease, and we expect this to lead to a low, no-growth economy.”
The Treasury said: “We have delivered a one-off budget in Parliament to clear the lid and provide the stability businesses so desperately need.
He added: “This is the start of our transformation plan, which unlocks investment, builds Britain through planning reform and employs a modern industrial strategy, giving businesses the certainty and stability they need to invest in growing and high-growth England. Potential areas.”
