Businesses are feeling increasingly confident about their finances and the trading environment and their concerns about inflation have eased significantly, an employers’ group has said.
Research by the British Chambers of Commerce found that in the three months to the end of June, 58 per cent of companies expected their revenue to increase over the next year, up from 56 per cent in the previous three months, while 13 per cent think their turnover will decrease.
Fears over inflation fell sharply, reflecting the sustained easing in price pressures. Forty-nine per cent said they were more worried about inflation compared with the previous quarter. This marks a return to 2021 levels and is down from a peak of 84 per cent in the middle of 2022 at the height of the cost of living crisis. Inflation has dropped to 2 per cent from a peak of 11.1 per cent.
The survey of nearly 5,000 companies was carried out between May 13 and June 10, meaning that it captured businesses’ mood during the general election campaign.
Labour hopes to oversee a period of more stable economic conditions after a series of crises that contributed to an increase in public debt and a higher tax burden. Last week, Goldman Sachs raised its forecast for Britain’s GDP growth this year by 0.1 percentage points in 2025 and 2026 after Labour secured its largest majority since 1997. Analysts at the American investment bank said that growth under Labour could be boosted by the party’s plans to overhaul the planning system, green investment spending and strengthening ties with the European Union.
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In a research note to clients, Goldman Sachs said: “Several Labour policies may affect the medium-term growth outlook. Reforms to the planning system could boost housebuilding and productivity; higher public sector investment could lift potential output; and closer trade ties with the EU could mitigate some of the costs of Brexit.”
The Office for National Statistics recently revised up its estimate for first-quarter GDP growth to 0.7 per cent from 0.6 per cent.
Shevaun Haviland, director-general of the BCC, said: “Our message to the new government is clear. We need a long-term economic plan that has the green transition at its heart, with a workforce fit for the future, living in thriving local places and powered by businesses that are globally facing and digitally enabled. Business stands ready to work in partnership with government to capitalise on the positive signs our data is showing.”
