LONDON, Oct 19 (Reuters) – Confidence among British businesses has fallen sharply, hit by a toxic combination of rising prices and economic turmoil, surveys showed on Wednesday.
The Federation of Small Businesses (FSB), the trade body, said its latest small business confidence index fell to -35.9 from -24.7, the worst reading outside of the Covid-19 lockdowns.
The survey ran from September 20 to October 4 and covers the period since Prime Minister Liz Truss’s economic plan was published on September 23, sparking a historic sell-off in British assets.
A separate report from the Employment and Employment Confederation for the period from July to the end of September showed that businesses’ outlook for the economy and employment and investment fell sharply.
The surveys underline the risk and scale of the recession faced by the new Chancellor of the Exchequer, Jeremy Hunt, to reorient Britain’s economy.
FSB national chairman Martin McTague said: “The recent political and economic turmoil has not helped, which is why it is important for the government to focus on stability.
According to the FSB, 68 percent of small businesses paid wages last year, with an average wage increase of 4.5 percent.
A separate survey by human resources data company ExpertHR found that the median company pay agreement was 4% in the three months ending in September, unchanged for the sixth month running.
However, companies said they expect payouts to increase further next year, averaging 5 percent in August 2023.
“Companies are under increasing pressure to increase pay as the cost of living continues to rise,” said Sheila Atwood, director of compensation and benefits at XpertHR.
“However, while inflation is a major factor that may increase the value of salary awards, employers should take this into account when making the final decision.”
Official consumer price figures for September are due at 0600 GMT. A Reuters poll of economists said in August that annual inflation would rise to 10 percent from 9.9 percent in the headline.
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Reporting by Andy Bruce Editing by Mark Potter
Our Standards: The Thomson Reuters Trust Principles.
