Latest news with #AlpeshPaleja
Reuters
5 days ago
- Business
- Reuters
Trade war, labour costs herald weakest UK outlook since 2022, CBI says
LONDON, June 2 (Reuters) - British firms expect output to slide over the next three months, in their gloomiest outlook since September 2022, as the implications of U.S. tariffs and higher payroll taxes weigh on the private sector, an industry survey showed on Monday. The Confederation of British Industry said the output expectations gauge of its surveys of the services sector, manufacturers and retailers fell to a net balance of -30 in May, down from -21 in April. Private sector activity fell in the three months to May to -26, down from -19 a month earlier. "Firms highlight numerous headwinds: the continued impact of higher employer National Insurance Contributions and the National Living Wage hike on their costs and operations, (and) further uncertainty from developments in the global trade landscape, compounded by a general sense of weak demand at home," Alpesh Paleja, deputy chief economist at the CBI, said. Firms expected to cut hiring over the next three months to meet cost pressures, the CBI said, including a 25 billion pound ($34 billion) increase in social security contributions announced by finance minister Rachel Reeves last October and a nearly 7% uplift in the minimum wage. The CBI survey contrasts with the trend in a poll from the Institute of Directors published on Sunday which showed confidence amongst business leaders about the UK economy jumped to its highest since August 2024, although it remained negative. Britain's economy grew more strongly than expected in the first three months of 2025, but the Bank of England said it expects a modest hit to growth from U.S. President Donald Trump's tariffs. Reeves is set to deliver her first multi-year spending review on June 11 which will set budgets for public services through to 2029. Anna Leach, chief economist at the IoD, urged Reeves to avoid any new spending commitments that might require further tax rises and said it was "concerning see UK government borrowing costs rising amidst building pressure to unwind attempts to moderate public sector spending". The CBI data was based on a survey of 650 companies between April 25 and May 14 and the IoD surveyed 483 generally small firms between May 15 and May 28. ($1 = 0.7422 pounds)
Yahoo
5 days ago
- Business
- Yahoo
Trade war, labour costs herald weakest UK outlook since 2022, CBI says
By Suban Abdulla LONDON (Reuters) -British firms expect output to slide over the next three months, in their gloomiest outlook since September 2022, as the implications of U.S. tariffs and higher payroll taxes weigh on the private sector, an industry survey showed on Monday. The Confederation of British Industry said the output expectations gauge of its surveys of the services sector, manufacturers and retailers fell to a net balance of -30 in May, down from -21 in April. Private sector activity fell in the three months to May to -26, down from -19 a month earlier. "Firms highlight numerous headwinds: the continued impact of higher employer National Insurance Contributions and the National Living Wage hike on their costs and operations, (and) further uncertainty from developments in the global trade landscape, compounded by a general sense of weak demand at home," Alpesh Paleja, deputy chief economist at the CBI, said. Firms expected to cut hiring over the next three months to meet cost pressures, the CBI said, including a 25 billion pound ($34 billion) increase in social security contributions announced by finance minister Rachel Reeves last October and a nearly 7% uplift in the minimum wage. The CBI survey contrasts with the trend in a poll from the Institute of Directors published on Sunday which showed confidence amongst business leaders about the UK economy jumped to its highest since August 2024, although it remained negative. Britain's economy grew more strongly than expected in the first three months of 2025, but the Bank of England said it expects a modest hit to growth from U.S. President Donald Trump's tariffs. Reeves is set to deliver her first multi-year spending review on June 11 which will set budgets for public services through to 2029. Anna Leach, chief economist at the IoD, urged Reeves to avoid any new spending commitments that might require further tax rises and said it was "concerning see UK government borrowing costs rising amidst building pressure to unwind attempts to moderate public sector spending". The CBI data was based on a survey of 650 companies between April 25 and May 14 and the IoD surveyed 483 generally small firms between May 15 and May 28. ($1 = 0.7422 pounds) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-03-2025
- Business
- Yahoo
UK services firms report falling profits, higher costs, CBI says
LONDON (Reuters) - Profits made by services firms, which dominate Britain's economy, have plunged and confidence has dried up especially among consumer-facing companies exposed to the cost-of-living crunch, according to an industry survey. The Confederation of British Industry's quarterly survey of services firms, published on Thursday, showed profitability among business and professional firms fell to -37 in the three months to February, the fastest drop since August 2020 and down from -32 in the previous quarter. Morale among consumer-facing firms remained at its joint-lowest since August 2022 at -55 in February. The survey added to signs of concern among employers after finance minister Rachel Reeves increased the social security contributions paid by employers by 25 billion pounds in her first budget in October and announced a 6.7% rise in the minimum wage, both coming into force in April. "While businesses are grappling with the rise in employment costs from measures in the autumn budget, it's clear that underlying demand conditions remain weak too," the CBI's deputy chief economist Alpesh Paleja said. "In particular, the much deeper weakness in consumer services firms points to a cautious spending mindset among households," Alpesh said. Employment fell across both areas of the services sector and businesses expect to reduce staffing in the coming three months. Thursday's survey chimed with the closely watched S&P Global PMI survey's gauge of employment which last week showed the sharpest fall in staffing levels in over four years in February. The CBI's measure of volumes among business services firms in the three months to February fell sharply to -26 from -5 in the three months to November, and firms expect volumes to decline in the coming three months albeit at a slower pace. Expectations for price increases among consumer-facing services companies and business and professional firms rose significantly compared with the previous survey. The Bank of England is monitoring service prices closely as it tries to gauge the strength of underlying inflation pressures and the appropriate pace of further interest rate cuts. The latest survey was based on responses from 517 services companies collected between January 28 and February 13. Sign in to access your portfolio
The Guardian
03-03-2025
- Business
- The Guardian
Weak UK consumer spending is denting business mood, says CBI
Business activity across the UK private sector declined in the last three months, a survey has found, as weak consumer spending hits companies. The latest growth indicator produced by the Confederation of British Industry (CBI) shows that UK private sector activity fell again in the three months to February, at a faster rate than in the quarter to January. All sectors reported falling business volumes, the CBI says, pulling its growth index down to -27% in February, from -23% a month earlier. In a worrying sign, private sector firms also expect another fall in activity over the next three months, as the economy struggles. 'There are some glimmers of hope in our latest surveys,' said Alpesh Paleja, the CBI deputy chief economist. 'Growth expectations have become marginally less negative, driven by a predicted return to growth in the manufacturing sector. But overall, the data still paints a picture of a tough operating environment for businesses, with consumer-facing sectors faring particularly badly.' The CBI hopes the government will usher in measures such as changes to the apprenticeship levy, increased incentives for occupational health, or an overhaul of business rates, to help lift business confidence. A separate survey from the accountancy network BDO found that medium-sized companies were most concerned about barriers to international expansion and rising workforce costs. BDO polled 500 business leaders at mid-sized companies with turnovers between £10m and £300m, and found that almost half want better support from the government to begin or continue exporting abroad. This includes broadening the access to UK Export Finance support to the mid-market, new free trade agreements and simpler customs rules to aid the export of products or services overseas. In January, the EU's new trade chief said the bloc could consider including the UK in a pan-European trade agreement, by letting it join the Pan-Euro-Mediterranean convention. That would create 'dynamic alignment' between the UK and EU, potentially helping the UK's food and farming industry. A quarter of business leaders polled by BDO cited rising workforce costs, such as national insurance contributions (NICs) and the living wage, as a significant worry. The government has resisted pressure to ditch the increase in employer NICs rates which begins in April.
Zawya
27-02-2025
- Business
- Zawya
UK services firms report falling profits, higher costs, CBI says
LONDON: Profits made by services firms, which dominate Britain's economy, have plunged and confidence has dried up especially among consumer-facing companies exposed to the cost-of-living crunch, according to an industry survey. The Confederation of British Industry's quarterly survey of services firms, published on Thursday, showed profitability among business and professional firms fell to -37 in the three months to February, the fastest drop since August 2020 and down from -32 in the previous quarter. Morale among consumer-facing firms remained at its joint-lowest since August 2022 at -55 in February. The survey added to signs of concern among employers after finance minister Rachel Reeves increased the social security contributions paid by employers by 25 billion pounds in her first budget in October and announced a 6.7% rise in the minimum wage, both coming into force in April. "While businesses are grappling with the rise in employment costs from measures in the autumn budget, it's clear that underlying demand conditions remain weak too," the CBI's deputy chief economist Alpesh Paleja said. "In particular, the much deeper weakness in consumer services firms points to a cautious spending mindset among households," Alpesh said. Employment fell across both areas of the services sector and businesses expect to reduce staffing in the coming three months. Thursday's survey chimed with the closely watched S&P Global PMI survey's gauge of employment which last week showed the sharpest fall in staffing levels in over four years in February. The CBI's measure of volumes among business services firms in the three months to February fell sharply to -26 from -5 in the three months to November, and firms expect volumes to decline in the coming three months albeit at a slower pace. Expectations for price increases among consumer-facing services companies and business and professional firms rose significantly compared with the previous survey. The Bank of England is monitoring service prices closely as it tries to gauge the strength of underlying inflation pressures and the appropriate pace of further interest rate cuts. The latest survey was based on responses from 517 services companies collected between January 28 and February 13. (Reporting by Suban Abdulla Editing by William Schomberg)
