British companies plan to raise prices to cover higher tax payments as confidence among businesses falls to its lowest level since the market shake-up The “mini-budget” crisis. For fall 2022, according to a survey conducted by the British Chambers of Commerce.
The trade group said sentiment had “declined significantly” in its markets The largest poll Since the Labor government The budget debuted last Octoberwhich included an increase in the amount many employers pay into National Insurance (NI), a tax on profits.
The BCC said 63% of businesses cited taxes as a concern in the survey, compared to 48% in the third quarter. More than half (55%) said they expected prices to rise in the next three months, primarily due to higher labor costs.
The percentage of companies that said they expect their business volume to increase during the next 12 months fell to 49%, from 56%. Concerns about Economic inflation and Interest rates It remained almost constant.
The BCC cited companies in hospitality, manufacturing, construction and healthcare as expressing concerns about how to cover the additional costs and said they would likely reduce investment.
“We realize what (Reeves) said, which is that she has to raise taxes to fill her black hole, but what we need to see her do now is mitigate that. What are we going to do to get the economy going?” BCC President Shevon Haviland told CNBC's “Squawk Box Europe” on Monday.
“Businesses will have to bear this tax increase, but what we want to see them do is act, and they have to act quickly. It is important that they put strategies in place, such as the industrial strategy, the trade strategy and the infrastructure plan, later this year.” But we need to see action now.”
UK borrowing costs rose after the October 2024 Budget, surpassing the levels they reached after the September 2022 “mini-Budget”, which saw then-Prime Minister Liz Truss. Announcing broad, inexpensive tax cuts.
However, economists say The recent rise in bond yields is not the equivalent To the rally seen in 2022 where moves were noticeably less dramatic and the macro backdrop changed – including cooling inflation.
