Business confidence slips as costs rise

The latest British Chambers of Commerce Quarterly Economic Survey suggests business confidence has weakened again.

Less than half of responding businesses — 46% — expect their turnover to increase over the next 12 months. That’s the lowest level recorded in three years and a reminder that, for many firms, recovery still feels fragile rather than secure.

The survey gathered responses from more than 4,600 businesses, mainly SMEs, between mid-November and early December, spanning the period before and after the Autumn Budget.

Costs are still driving decisions

Cost pressures remain a major factor.

• 52% of businesses plan to increase prices in the next three months (up from 44% in the previous quarter).
• 27% report cutting back investment plans, while only 19% have increased investment.
• In hospitality, retail and manufacturing, more than a third of firms are reducing planned spending.

Those figures tell a fairly clear story. Businesses are protecting margins first, investing second.

Tax and inflation remain front of mind

Taxation continues to be the leading concern, cited by 63% of respondents - up on the previous quarter and matching levels seen after last year’s Budget. Concerns were particularly high ahead of the Chancellor’s statement and eased slightly afterwards.

Inflation remains a significant worry for more than half of firms, and despite recent interest rate cuts, many businesses report little sign of renewed momentum.

With forecasts suggesting rising unemployment and further cost pressures ahead, caution seems to be the prevailing mood.

What this means in practice

None of this means businesses should stop planning. If anything, it makes planning more important.

In uncertain conditions, the fundamentals matter:

• clear cashflow forecasts
• realistic pricing decisions
• disciplined cost control
• and sensible investment timing

Confidence doesn’t usually return because a headline changes. It tends to improve when business owners feel they understand their numbers and have options.

If the wider economic picture feels unsettled, focus on what you can control. Clear information reduces uncertainty, and uncertainty is often what drives stress.

If you’d like to talk through what the current climate means for your business specifically, that’s exactly the kind of conversation I have every day.