UK businesses plan price increases as confidence wanes in anticipation of Budget

A new report by the British Chambers of Commerce (BCC) has underlined some worrying developments in the realm of UK business, where confidence is slipping ahead of the incoming Autumn Budget. In the organisation’s ‘Quarterly Economic Survey’, for which over 4,800 UK businesses were polled, around 63 percent of firms said the Chanceller’s autumn statement was worrying, an increase on the 48 percent recorded in Q3.

Next to this, business confidence has also fallen, with 49 percent of respondents anticipating a turnover increase over the next 12 months, down from the prior 56 percent. The BCC said confidence levels were lowest among retail, at 39 percent, and hospitality, at 42 percent. Concerns about taxation were shared among 63 percent of respondents, up from 48 percent in Q3, making it the highest level of tax concern since 2017, when the BCC first started asking this question. Worry towards inflation remained similar to the previous quarter, at 47 percent.

In response to the budget, 55 percent of firms said they were expecting to raise their prices in the next three months, up from 39 percent. An additional 43 percent said they expected prices to stay the same. Labour costs were cited as the main cost pressure, as raised by 75 percent of businesses.

BCC calls for ‘quick action’ to rectify waning confidence

In the report, director general of the BCC, Shevan Haviland, said confidence had “slumped in a pressure cooker of rising costs and taxes”, with firms of all shapes and sizes expressing concern over incoming changes, particularly that of the national insurance hike. Haviland continued: “The government is rightly coming up with long-term strategies on industry, infrastructure and trade. But those plans won’t help businesses struggling now.”

Haviland then called on ministers to bring “quick action in three specific areas”, including the acceleration of business rate reform to incentivise investment, the speeding up of infrastructure investment to aid supply chains and prioritising a better trading deal with the European Union. His statement concluded: “Without urgent government action to ease the pain on businesses, the challenging economic landscape will get worse before it gets better.”