A record number of British business leaders are preparing for unprecedented cost pressure over the next year, driven by tax increase, increased energy bills and increased wage requirements, according to a new survey conducted by the IOD Institute.
The poll revealed that 89 % of the respondents expect their costs to climb, with only 2 % decrease.
Pessimism increased inside the board of directors, with a net balance of 64 % of presidents who express the dark economic view – to the peak registered at the height of the epidemic. Nearly half of those surveyed said that they would reduce the number of employees to deal with the high £ 25 billion in the Labor Party, due to the valid in the next month. Two of every five plan to increase prices to compensate for these additional costs.
Anna Leich, IOD's chief economist, highlighted the broader concerns facing UK companies, from the cost of energy and inflationary pressure to the uncertainty caused by the US decisions in the United States. “In the midst of discounts in growth expectations in the United Kingdom, companies are still concerned about the health of the British economy, as well as tax and regulatory burdens,” Leich said. “About a half expects to reduce employment in response to high costs.”
Meanwhile, the Deputy Governor of the Bank of England, Sir Dave Ramsden, warned against lowering premature interest rates, citing a high wage growth. Inflation rose to 3 % last month, and is expected to approach 4 % by the end of the year-higher than the bank's goal by 2 %.
Sir Dave, who previously called for faster price cuts, noticed the increased uncertainty facing the economy. He warned that the risk of adding to inflationary pressures means that policy makers should take carefully: “Because of the evidence in recent months, I no longer think that the risks to reaching the target of inflation by 2 % … is the negative side. Instead, I think they are both sides.”
While he acknowledged that the high taxes in the Labor Party may harm the growth of jobs, it is no longer considered a sufficient reason to reduce prices more quickly. “I am more certain … that following a gradual and accurate approach in the withdrawal of cash self -control is appropriate.”
A Treasury spokesman defended government policy, pointing to its last budget as an incentive to revive growth after a continuous period of stagnation. The spokesman added: “At the same time, more than half of the employers will see either a reduction or there is no change in their national insurance bills, and we are constantly lowering the prices of business for retail, hospitality and entertainment from 2026 for the first time, and we have crowned the corporate tax by 25 %.”
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