Chancellor Rachel Reeves is being urged to “re-think her budget following last week’s announcement on inflation, the announcement from the Bank of England on Interest Rates being held at 4.75%, and todays warning from the Confederation of British industry (CBI) that the UK economy is heading “for the worst of all worlds” as gross domestic product (GDP) showed no growth in the third quarter of 2024, according to official figures.
The stagnation comes as business groups warn that activity is set to fall at the start of the new year.
Alpesh Paleja, the Confederation of British Industry (CBI) 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.”
The impact on employment is especially serious, with the CBI survey of 899 firms showing that private sector employment “will be cut sharply” in the first quarter of 2025.
The Bank of England’s recent announcement that interest rates will be held at 4/75%, triggered by inflation rising to 2.6% in the 12 months to November 2024 (up from 2.3% in October), and increasing water bills sending a stark warning: there’s little room for financial relief. This is devastating news for businesses, particularly in the hospitality and night-time economy, which are already operating on razor-thin margins.
Despite being instrumental in the country’s recovery from the last financial crisis, our industry has been marginalised by the government’s recent Autumn Budget. Far from driving growth, the Chancellor’s plans have left businesses in the night-time economy grappling with insurmountable financial pressures. Operating costs are soaring, and access to capital is tightening—leaving many unable to invest, expand, or even stay afloat.
Michael Kill CEO NTIA
“The current financial situation for thousands of businesses is not sustainable. You cannot foster recovery while tying the hands of one of the economy’s most dynamic sectors behind its back. The current approach is a disservice to the businesses and workers who have consistently contributed to economic resilience.”
“The Spring Budget is a critical opportunity for the government to reassess its strategy and take decisive action. We demand targeted interventions, including relief on business rates, VAT reductions, and energy support, to safeguard the future of our industry.”
“The message to the Chancellor is clear: the night-time economy cannot survive on rhetoric. Bold steps are needed—don’t waste this chance to support a sector vital to the UK’s economic recovery.”
