Firms offer no festive cheer to Reeves with gloomy outlook for 2025
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Businesses have issued a stark warning to Rachel Reeves that the economy is “headed for the worst of all worlds” with activity expected to fall sharply in the first three months of 2025. A major survey by the Confederation of British Industry (CBI) found firms expected to reduce both output and hiring.
The Chancellor’s hike to employers’ national insurance, set to rake in around £25 billion a year, was highlighted as one of the reasons for the gloomy outlook. Alpesh Paleja, the CBI’s interim deputy chief economist, said: “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.
“Businesses continue to cite the impact of measures announced in the Budget – particularly the rise in employer NICs – exacerbating an already tepid demand environment. “As we head into 2025, firms are looking to the Government to boost confidence and to give them a reason to invest, whether that’s long overdue moves to reform the apprenticeship levy, supporting the health of the workforce through increased occupational health incentives or a reform of business rates.
“In the longer term, businesses will be looking to the industrial strategy to provide the stability and certainty which can unlock innovation and investment – and provide that much-needed growth for the economy which can deliver prosperity for firms and households alike.”.
