Economic contraction disappointing, but business not surprised – Chamber

The GDP figures released today will be disappointing for the government, but businesses in Greater Birmingham are unsurprised given the additional cost pressures businesses are anticipating from April.

The sentiments come from business leaders in Greater Birmingham after the Office for National Statistics (ONS) revealed the economy shrank unexpectedly by 0.1 per cent in January, with a slowdown in manufacturing one of the main reasons for the dip.

The performance was weaker than expected, and came after the economy had grown by 0.4 per cent in December.

The figures come ahead of the chancellor's Spring Statement, which will give an update on the economic and fiscal outlook for the country and will likely announce policy changes in response to this outlook.

Speaking about the figures, Greater Birmingham Chambers of Commerce’s head of policy, Emily Stubbs (pictured) said: “GDP shrinking in January and tepid growth over the last three months will be disappointing news to the Government this morning.

"However, it's perhaps unsurprising as businesses face the looming prospect of additional cost pressures from April.

“Our latest research indicates that the national insurance hike announced in the autumn budget will hit investment, recruitment and prices in the coming months.

"The Chancellor must use the upcoming spring statement as an opportunity to reduce the tax burdens on businesses and provide the clarity of direction needed for firms to make investment decisions.

"Movement on business rates reform, infrastructure development and boosting trade relationships with our EU counterparts will also be critical to improving business confidence."

Click here to read the 2024 Autumn Budget's impact for Greater Birmingham Businesses.