Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Rising costs and consumer woes blight business outlook

by February 13, 2023
February 13, 2023
Rising costs and consumer woes blight business outlook

Businesses remain pessimistic about the outlook for the economy after a sharp decline in output last month prompted many to scrap any hiring plans they had.

For the fourth month in a row, BDO’s optimism index was stuck in negative territory with a reading of 91.88 in January, slightly worse than the 91.89 recorded in December. Anything below 95 is considered negative.

Reflecting the jump in borrowing costs, the probability of a recession, tumbling consumer confidence and rampant inflation in the past year, optimism among British businesses has declined rapidly. In January 2022, BDO’s optimism reading was close to 105.

Although the economy narrowly avoided entering a technical recession at the end of last year, Jeremy Hunt, the chancellor, has warned that Britain is “not out of the woods yet”.

Companies in the services sector, including retailers, restaurants and accountants, were especially downbeat in January, although after nine months of declines optimism among manufacturers improved amid signs that cost inflation is starting to ease.

Inflation retreated again in January, largely because of falling energy prices, and now stands at its lowest point since last spring, although “inflationary pressures remain historically elevated”.

BDO’s survey chimes with official data. Inflation looks to have peaked in October at 11.1 per cent and had fallen to 10.5 per cent by the end of December. The Bank of England expects inflation to be as low as 4 per cent by the end of the year after a fall in natural gas prices.

BDO, an accounting firm, noted a “sharp decline” in the number of goods and services that British companies sold in January, with its output reading sliding almost 3.5 points to 89.15. It was the second month in a row that the index was below the 95 threshold for growth. It blamed the cost of living for weakening consumer spending.

Business owners have responded by scaling back their expansion plans, with BDO’s employment index, which measures hiring intentions, dropping to its lowest level since the end of 2021.

It was the third time in six months that BDO had seen all four of its measures — optimism, output, inflation and employment — fall at the same time.

“A net decline across the optimism, output and employment indices, coupled with historically high levels of inflation, suggests the outlook still remains bleak for businesses,” Ed Dwan, a partner at BDO, said.

Wishlist for the budget
There are four “non-negotiables” that the chancellor must address in next month’s budget, according to the British Chambers of Commerce. The business lobby group has called on Jeremy Hunt to unlock talent by making childcare more affordable and it also wants to see the business rates system reformed further. It is pushing for a new framework for Solvency II rules on regulatory requirements to encourage more investment into “green innovation”, as well as extra funding to help companies to improve their energy efficiency.

Read more:
Rising costs and consumer woes blight business outlook

0
FacebookTwitterGoogle +Pinterest
previous post
NYC mayor says COVID mandates may need to return, blasts people who say ‘I want to do whatever I want’
next post
Reserved signs set to go up across high street

You may also like

Scrap 5p fuel duty cut as drivers miss...

August 29, 2024

Rivian pulls plug on Mercedes electric van deal

December 13, 2022

Royal Mint opens pioneering facility in south Wales...

August 7, 2024

The Influence of Chemical Companies on Modern Life

April 9, 2024

BMW in negotiations for £75M from government to...

February 6, 2023

Britain’s technology infrastructure in focus amid fears of...

September 5, 2022

HMRC targets specialist agents in crackdown on R&D...

November 18, 2024

Think tank urges Labour to consider inheritance and...

September 10, 2024

HMRC recovers £70m in tax crackdown on footballers...

August 24, 2024

How to Remove Objects from Photos Online: A...

September 25, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • M&S reopens online orders after cyberattack disruption

      June 10, 2025
    • UK payrolls see biggest drop since covid as wage growth slows and job market weakens

      June 10, 2025
    • Why AI and green tech are vital to SME growth in 2025

      June 10, 2025
    • Yes, it’s great to get PR coverage – until it’s locked behind a bloody paywall

      June 10, 2025
    • We have to act now to keep AI from becoming a far-left Trojan Horse

      June 10, 2025
    • SME lending delays slashed by 80% thanks to fintech-driven back-office reform

      June 10, 2025

    Categories

    • Business (8,174)
    • Investing (2,021)
    • Politics (15,580)
    • Stocks (3,138)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved