British business is ‘bruised’ and cannot take ‘another Budget battering’, Rachel Reeves was warned last night. The British Chambers of Commerce (BCC) said confidence among employers remains stuck at a three-year low as fears of another round of tax rises mount.
Less than half of firms expect trade to pick up over the next 12 months as the economy continues to reel from the £40billion of extra taxes announced in last year’s Budget. That included a £25billion raid on National Insurance Contributions paid by businesses, which pushed up the cost of employing staff – leading to job losses and higher prices.
The survey of 4,600 firms found tax ‘continues to be the biggest concern for businesses’ as the Chancellor plots another punishing raid next month. It is feared she could announce fresh rises to the tune of £30billion to plug a hole in the finances as a floundering economy and lavish Government spending take their toll.
David Bharier, head of research at the BCC, said: ‘Firms remain bruised and are not ready for another Budget battering. ‘Our message to the Chancellor ahead of the Budget is clear – no further tax rises on business.’ The BCC said that without ‘urgent action’ to boost business ‘confidence could deteriorate further, putting economic growth at risk’.
Shadow chancellor Mel Stride said: ‘Another day, another report confirming what businesses already know – confidence in the economy is collapsing. ‘Business confidence has been shattered – not by global uncertainty, but by deliberate choices made by Rachel Reeves.’ A separate report by KPMG and the Recruitment and Employment Confederation showed demand for new staff falling as firms put off hiring.
KPMG boss Jon Holt said: ‘With little positive news out there on the economy, and lots of speculation about the Budget, it is understandable employers are cautious with their hiring.’ The BCC survey found 59 per cent of firms now cite tax as a worry – up from just 36 per cent ahead of last year’s Budget.
The report also found ‘a sharp rise in concern about inflation ’, now identified as a worry by 57 per cent of firms – its highest level since the start of 2024. Inflation had fallen to 1.7 per cent before last October’s Budget, but now stands at 3.8 per cent – nearly twice the 2 per cent target and is the highest in the G7.
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