Confidence in UK’s economic prospects hits rock bottom as firms prepare for bleak winter

December 16, 2022

Businesses in the West of England are now far more concerned about their prospects than they were at the height of the pandemic, while an all-time low of just 6% have confidence in the UK’s economic outlook.

Three quarters of companies taking part in the latest quarterly economic survey staged by Business West – the group behind Bristol Chamber of  Commerce – said they are concerned about the general economic conditions and 63% of businesses said general business uncertainty is a key concern. 

These figures have jumped by more than 20 percentage points since this time last year, when businesses were still being hit by Covid-related factors.

More than half of businesses reported that political and economic instability had a material impact on their business in the last quarter.

The percentage of businesses concerned by taxation soared to 38% from 22% in the third quarter, a fact Business Link said could possibly be linked to the Autumn Budget from Chancellor Jeremy Hunt, pictured, which took place halfway through the survey period and further increased in the tax burden on the back of major U-turns immediately following the end of the Truss government.

The tax burden relative to the economy’s overall size has now reached a historic high, Business Link pointed out.

Business confidence in the UK economy also reached a new low, according to the survey results, with only 6% of companies feeling confident in the nation’s economic prospects.

Some 46% of businesses are confident about their own business prospects, a decrease of almost 20% since this time last year.

The gap between confidence in their own business and that of the UK economy is the highest ever recorded in the survey.

Meanwhile, prices are continuing to soar for businesses, with more than half of firms having increased their prices in the past three months.

Rising inflation looks is set to continue, with more than half of firms expecting to put their prices up in the next three months.

While the proportion of businesses worried about inflation dropped marginally to 67% from 73% in the third quarter, this was still the second highest ever recorded.

Among the 350-plus businesses taking part in the survey was Bristol-based Noma Architects.

Noma director Stephen Davis said: “Along with other professionals in the construction industry, our costs have risen but without the prospect of additional fees on secured appointments.

“We are experiencing higher costs (e.g. overheads, salaries) and lower productivity given difficulties with planning and dissolving contractor companies.”

The number of businesses reporting difficulties with recruiting staff remained high at 79%.

Workforce expansion remained with just 18% of businesses confirming increases in their personnel, and just 20% expecting to recruit over the next three months.

Business West director of policy Matt Griffith, pictured above, said: “2022 has been a very tough year for local businesses, with global inflation and economic headwinds compounded by a confidence sapping period of political uncertainty in the UK.

“The consequences are still being felt, both on business balance sheets and economic sentiment.

“We hope that 2023 holds more cheer, and it is a testament to business resilience that many still feel confident in their own business prospects.

“With luck the new year will bring a let up of pressures and we can start to report signs of green shoots in our future surveys.”

Comments are closed.


Reach tens of thousands of senior business people across Bristol for just £120 a month. Email for more information.