{"id":100241,"date":"2024-12-23T11:00:00","date_gmt":"2024-12-23T11:00:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=100241"},"modified":"2024-12-23T10:26:19","modified_gmt":"2024-12-23T10:26:19","slug":"uk-economic-outlook-dims","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/uk-economic-outlook-dims\/","title":{"rendered":"UK Economic Outlook Dims as Private Sector Struggles with Higher Costs"},"content":{"rendered":"\n

Recent policy changes, including a hike in employers’ National Insurance Contributions (NIC), have intensified the challenges faced by private sector firms. As economic growth expectations reach their lowest levels since 2022, confidence in the recovery appears increasingly fragile.<\/p>\n\n\n\n

UK : Businesses Expect Reduced Output Amid Rising Costs<\/h2>\n\n\n\n

The CBI<\/a>‘s growth survey, involving responses from 899 companies<\/strong>, reveals a bleak outlook for early 2025. Firms anticipate cutting back on hiring and scaling down output as the cost pressures mount. The increase in employers’ NICs, introduced by Chancellor Rachel Reeves<\/strong> and expected to generate \u00a325 billion annually<\/strong>, has been a focal point of criticism. Businesses cite this measure as a significant factor in their waning confidence.<\/p>\n\n\n\n

Alpesh Paleja, interim deputy chief economist at the CBI, remarked, \u201cThere is little festive cheer in our latest surveys, which suggest that the economy <\/a>is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.\u201d The survey <\/strong>reflects growing dissatisfaction within the private sector, particularly among small and medium enterprises, which are already grappling with subdued demand and constrained resources.<\/p>\n\n\n\n

The survey also aligns with data from the Office for National Statistics<\/a> (ONS), which reported a 0.1% economic contraction<\/strong> in October. This marks the second consecutive month of decline, further highlighting the UK’s economic vulnerability.<\/p>\n\n\n\n

Calls for Reform to Restore Confidence and Investment<\/h2>\n\n\n\n

Amid growing unease, businesses are urging the government to adopt measures <\/strong>to stimulate investment and restore confidence. Key recommendations include reforming the apprenticeship levy, revising business rates, and providing incentives for occupational health to support workforce stability. Such steps, industry leaders argue, could help address structural challenges and encourage long-term growth.<\/p>\n\n\n\n

Critics have been vocal about the government’s current fiscal policies, with Labour’s shadow business secretary Andrew Griffith<\/strong> describing the economic environment as a \u201chostile climate for aspiration, investment, and growth.\u201d He warned that current trends could push the UK closer to a recession, placing the blame on “tax-raising measures” and economic mismanagement.<\/p>\n\n\n\n

“If there is a recession – and based on these CBI expectations that seems increasingly likely – it will be one made in Downing Street. Labour needs to urgently change course before the damage they are doing becomes even greater.” he added.<\/p>\n\n\n\n

Despite the challenging circumstances<\/strong>, policymakers have defended their approach, emphasising the need to stabilise public finances and prioritise essential services like the NHS<\/strong>. Lucy Powel<\/strong>l, Labour MP and leader of the House of Commons, stated that addressing the economic \u201cblack hole\u201d inherited from previous administrations remains a key focus.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Confederation of British Industry (CBI) warns that the UK economy is “heading for the worst of all worlds,” with businesses forecasting a downturn in activity. The latest survey highlights concerns over falling output, reduced hiring, and rising costs as major hurdles to economic stability.<\/p>\n","protected":false},"author":10,"featured_media":100244,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-100241","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/100241","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=100241"}],"version-history":[{"count":3,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/100241\/revisions"}],"predecessor-version":[{"id":100263,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/100241\/revisions\/100263"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/100244"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=100241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=100241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=100241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}