Firms to cut staff and raise prices as CBI calls for measures to 'drive growth'
Firms to cut staff and raise prices as CBI calls for measures to 'drive growth'
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A continued slowdown in private sector activity could hinder economic growth in the coming months, as companies are expected to reduce staffing and increase prices, according to a new survey. The looming rise in national insurance contributions has forced firms to urgently reassess their budgets, the Confederation of British Industry (CBI) emphasised. Private sector output is anticipated to decline over the next three months, extending a downturn seen in the past quarter.
The CBI, representing everything from large chains to small enterprises, conducted the survey with 990 businesses between December and January. Following the Government's autumn Budget, business sentiment appeared to wane. Some respondents pointed out that tax increases led them to revise their financial plans abruptly and seek ways to manage escalating costs. Strategies include increasing prices to transfer extra costs to customers, scaling back on investment projects, and reducing workforce to slash company costs.
Meanwhile, the Government stands by its autumn Budget policies, insisting they are necessary to fill a "black hole" in national finances and to foster growth across various sectors. TheCBI has warned that private sector staffing is set to decrease in the upcoming months, as companies slow down hiring rates or relocate jobs abroad. This trend underscores a grim sentiment among CBI members about growth prospects within the UK and anticipation of rising selling prices.
