UK firms plan price rises as business confidence falls to lowest level since 2022 ‘mini-budget', survey finds

UK firms are planning to raise prices to cover higher tax payouts as confidence among businesses tumbled to its lowest level since the market-rocking "mini-budget" crisis of fall 2022, according to a survey by the British Chambers of Commerce.

The trade group said sentiment had "declined significantly" in its largest poll since the Labour government's debut budget last October, which included a hike in the amount many employers pay out in National Insurance (NI), a tax on earnings. 

The BCC said 63% of businesses cited tax as a worry in the survey, up from 48% in the third quarter. More than half (55%) said they expect prices to go up in the next three months, primarily due to higher labor costs.

The percentage of companies saying they expected turnover to increase in the next twelve months fell to 49%, from 56%. Concerns about inflation and interest rates remained roughly steady.

The BCC cited firms across hospitality, manufacturing, construction and healthcare expressing worries about how they would cover additional costs and saying they would likely scale back investment.

The Labour Party, which took office in July, argues tax rises were necessary to plug a major shortfall in the public finances left by the previous administration. It has also previously stated that more than half of U.K. employers will either experience a cut or no change in their national insurance bills due to exemptions.

But the BCC survey echoes prior findings of a decline in confidence among British companies in the wake of the budget, and previous criticism from senior business leaders that the budget has increased uncertainty and could hold back economic expansion — a key focus of Finance Minister Rachel Reeves' agenda.

The U.K. is already in a