Pressure is building over Britain’s powerhouse services sector as costs rise in the wake of the Budget, says the CBI.
In its report, the business lobby group said sentiment and activity had dropped in the past three months. Companies have been unable to raise the prices they charge customers, despite facing rising costs, meaning ‘profitability and employment fell sharply’.
The CBI found that firms expect further declines in the coming months as they brace for another surge in costs following rises in the minimum wage and a National Insurance tax raid on salary sacrifice pension contributions.
Making ends meet: Pressure is building over Britain’s powerhouse services sector as costs rise in the wake of the Budget
Charlotte Dendy, economic surveys and data manager at the CBI, said: ‘Businesses expect little near-term relief, with uncertainty about demand and persistent cost pressures set to constrain future hiring and investment plans.’
‘Last week’s Budget will add further costs to businesses.’
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