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Enterprise

Majority of firms to hike prices due to National Insurance increase

A Budget survey from Grant Thornton has found that 54 per cent of firms expect to hike prices in the next year while 52 per cent will cut jobs, reduce hiring or offer lower pay packets to employees

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A new survey suggests that a majority of businesses are set to raise prices in the coming year due to the government's national insurance hike, fuelling concerns that such moves might exacerbate inflationary pressures.

According to Grant Thornton’s business outlook tracker, over half of the respondents (54 per cent) indicated they would need to transfer increased employment costs to customers via higher prices in 2025, as reported by .

Schellion Horn, who leads economic consulting at Grant Thornton, commented that this trend is likely to "put pressure on inflation" and necessitate the Bank of England maintaining elevated interest rates for an extended period.

The survey, gathering input from 800 海角视频 firms, also found that a substantial proportion (52 per cent) are planning to either scale back on hiring, eliminate positions, or offer smaller pay packages to their workforce. "Just when there is light at the end of the tunnel, the market is now faced with further cost increases," added Horn.

In her inaugural Budget, Rachel Reeves announced a £40bn tax offensive, with businesses absorbing the lion's share through a £25bn uptick in employers’ national insurance. Furthermore, the Chancellor stepped up the minimum wage, adding additional strain to corporate finances.

Over recent weeks, various business groups have raised the alarm that these measures could compel them to slash jobs and augment prices. Corroborating this sentiment, an earlier report from the British Chambers of Commerce suggested that 55 per cent of firms anticipate increasing their prices within the next three months.

Economic momentum in the 海角视频 has decelerated, with a contraction recorded in October and forecasts from the Bank of England indicating a stagnant economy in the final quarter. With impending price increases, the Bank is expected to exercise caution regarding interest rate reductions in the new year, despite the economic slowdown.

The Bank's Governor, Andrew Bailey, emphasised a "gradual" approach to policy easing in December. Financial markets are currently predicting only two interest rate cuts in 2025.