A business survey showed that British business confidence fell to its lowest level since the “mini-budget” presented by former Prime Minister Liz Truss in September 2022, after unexpected large tax increases in the new Labor government’s budget issued on October 30. .
The British Chambers of Commerce, which conducts the largest private sector survey of British businesses, said confidence in sales over the next 12 months is the lowest since late 2022.
Disturbing implications
“The worrying implications for the budget are clearly visible in our survey data,” said British Chambers of Commerce Director General Shevon Haviland. “Business confidence has declined amid pressures from rising costs and taxes.”
Finance Minister Rachel Reeves announced tax increases of 40 billion pounds ($50 billion) on October 30, the largest amount in any budget since 1993.
The bulk of this amount will come through increased social security fees paid by employers.
The British Chambers of Commerce said that 55% of companies plan to raise prices compared to 39% in the previous quarter, while 24% intend to reduce investments compared to 18% previously.
The Chamber intends to release survey data on employment expectations on January 14.
The survey, conducted by the British Chambers of Commerce, included 4,800 companies, most of which employed less than 250 employees, in the period from November 11 to December 9.
The British economy recorded strong growth in the first half of 2024 while recovering from a slight recession in late 2023, before returning to recession again in the third quarter of last year.
The Bank of England expects zero growth in the last quarter of 2024, and 1.5% growth in 2025.
