The Budget hike to employers’ national insurance is ‘exacerbating an already tepid demand environment’, the CBI warned.
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.
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.
The CBI’s growth indicator survey, based on responses from 899 companies between November 25 and December 12, found expectations for growth are now at their weakest since November 2022 in the aftermath of Liz Truss’s chaotic tenure in No 10.
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