Shrinking economy will further challenge business confidence

East Midlands Chamber has given its reaction as GDP dipped 0.1% in January, according to latest estimated figures from the Office for National Statistics.

Director of Policy and Insight Richard Blackmore said: “Any drop in economic growth will turn up the alarm volume for businesses, further underlining the fragile confidence so many businesses have right now. Our Quarterly Economic Survey for the East Midlands at the end of 2024 was already showing a significant fall in confidence, with businesses lowering their profit and turnover expectations, and adjusting their investment plans for recruitment, plant and machinery downwards.  Our latest survey covering the first part of this year will be released shortly and initial data we’ve seen paints a similar picture.

“While there was some growth in GDP at the end of last year, there’s work to be done to reverse some of the concerns of businesses at a time when they’re just weeks away from a barrage of cost hikes, like higher National Insurance contributions from April. All eyes will now be on the government and what’s said in the spring statement and spending review later in the year.  Political leaders must seize any opportunity to turn confidence around with a fully supportive approach with business at the centre, essential at such a turbulent time for firms.”