Survey reveals drop in UK business confidence amid economic uncertainty
RACHEL Reeves has faced a setback as a significant survey indicates that UK business leaders anticipate a decline in the economy over the next year. The report shows that one in four company CEOs foresee a downturn, a notable increase from just 13 per cent last year following recent tax-raising measures, reports BritPanorama.
As Ms Reeves prepares to attend the upcoming Davos summit, nearly 38 per cent of executives predict economic growth, marking a sharp drop from the 61 per cent who held that view last year, according to the PwC Global CEO survey. This decline in optimism underscores the growing concerns within the business community regarding the economic outlook.
Despite the UK retaining its status as the second most important destination for investment, it now shares this rank with Germany and India, reflecting a competitive landscape for foreign investment. Labour’s measures, including increases in national insurance contributions, are cited as factors hampering investment and recruitment plans.
Shadow Business Secretary Andrew Griffith remarked on the stark contrast in business confidence compared to the previous year, highlighting that the Chancellor’s policies have significantly impacted perceptions among CEOs. He stated, “The damage the Chancellor has done to confidence is clear with almost double the number of bosses expecting the UK economy to decline as a year ago.”
Additionally, Richard Tice, deputy of Reform UK, labelled the findings as a “terrible indictment” of Labour’s effect on business confidence. Many business leaders expressed apprehension about their firms’ adaptability, with a significant number citing bureaucratic hurdles as an obstacle to innovation. The survey revealed that only 22 per cent of companies approved high-risk projects, indicating a cautious approach to growth.
Marco Amitrano of PwC underscored the importance of the UK maintaining a competitive edge in the global market, stating that while the country appears stable, it must step up efforts to attract investment. He emphasized the importance of government-business collaboration to support growth sectors and enhance trade opportunities.
The findings stem from a survey conducted by PwC, involving 4,454 CEOs across 95 countries from late September to early November last year. In response to these challenges, a Treasury spokesman affirmed that the UK remains an appealing place for business investment, pointing to its stability, talented workforce, and supportive investment climate.
The landscape for the UK economy remains challenging, with increasing pressures on businesses amid a shifting global context.
As political and economic dynamics evolve, the need for strategic collaboration between government and business sectors will be crucial to navigate the uncertainties ahead.
