According to the latest British Chambers of Commerce Quarterly Economic Survey, UK business confidence has weakened further, with more firms expecting to raise prices and scale back investment as economic pressures persist.
Less than half of responding businesses, 46%, expect their turnover to increase over the next 12 months. This marks the lowest level of confidence recorded in three years and underlines the continued fragility of the recovery for many firms.
Cost pressures remain acute. Over half of businesses, 52%, plan to increase prices in the next three months, a sharp increase from 44% in the previous quarter. At the same time, more than a quarter of firms, 27%, report cutting back their investment plans, while only 19% have increased investment. Pullbacks are most pronounced in the hospitality, retail, and manufacturing sectors, where more than a third of businesses are reducing their planned spending.
The survey, which gathered responses from more than 4,600 businesses across the UK, primarily SMEs, was conducted between mid-November and early December, spanning the period before and after the Autumn Budget.
Taxation remains the leading concern for businesses, cited by 63% of respondents, an increase on the previous quarter and matching levels seen after last year’s Budget. Worries were particularly high ahead of the Chancellor’s statement, easing slightly afterwards. Inflation also continues to weigh heavily, troubling more than half of firms.
Despite recent interest rate cuts, businesses report little evidence of renewed momentum. With further cost pressures expected and forecasts pointing to rising unemployment, many firms are entering the year ahead with caution rather than confidence.
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