Britain facing a 'recession made in Downing Street': Economy is heading for 'worst of all worlds'
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Britain is facing a 'recession made in Downing Street' next year – as business chiefs warned that Labour's tax hikes were hitting jobs, investment and growth. The Confederation of British Industry said the economy was heading for the 'worst of all worlds' as businesses grapple with Chancellor Rachel Reeves' 'tax-bomb' Budget.
![[The CBI has said there is 'little festive cheer', with its surveys suggesting that the economy is heading for the 'worst of all worlds' (file photo)]](https://i.dailymail.co.uk/1s/2024/12/23/00/93412449-14219887-The_CBI_has_said_there_is_little_festive_cheer_with_its_surveys_-a-58_1734912221730.jpg)
The employers' organisation said the outlook for the start of 2025 was 'firmly negative' across all main sectors, including manufacturing, services and retail – with firms directly blaming the £25 billion Budget hike in employers' National Insurance.
![[Tory business spokesperson Andrew Griffith said the country could be heading for a 'recession... made in Downing Street']](https://i.dailymail.co.uk/1s/2024/12/23/00/93412039-14219887-Tory_business_spokesperson_Andrew_Griffith_said_the_country_coul-a-59_1734912221739.jpg)
Alpesh Paleja, the confederation's deputy chief economist, said: 'There is little festive cheer in our latest surveys, which suggest that the economy is headed for – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.
![[The gloomy outlook may see retailers left with no choice but to raise prices or cut costs, including scaling back on employment and closing stores (file photo)]](https://i.dailymail.co.uk/1s/2024/12/23/00/93412451-14219887-The_gloomy_outlook_may_see_retailers_left_with_no_choice_but_to_-a-60_1734912221746.jpg)
'Businesses continue to cite the impact of measures announced in the Budget – particularly the rise in employer National Insurance contributions – exacerbating an already tepid demand environment.'. The warning follows recent figures showing the economy shrank for the second month in a row in October, causing the Bank of England to cut its growth forecast for the final quarter of this year to zero.
The Bank's former deputy governor, Sir Charlie Bean, yesterday said the Office for Budget Responsibility (OBR) was also likely to cut its official forecasts for next year, having previously predicted growth of 2 per cent. He told Sky News: 'If the OBR were to conduct new forecasts now, they would be downgrading that growth forecast simply because they have information about growth at the back end of this year, which they didn't previously have. So it is reasonable to expect them to project lower growth for 2025.'.
