The Confederation of British Industry (CBI) praised Chancellor Jeremy Hunt for ‘delivering stability and protecting the most vulnerable‘ in the Autumn Statement.

The business group welcomed the freeze in business rates and extra support for those facing higher bills. Additionally, it said that staying the course on R&D spending and major infrastructure will give a boost to communities and the country.

However, the CBI also warned the government that many businesses will ‘think there’s more to be done on growth’. It stated that stabilising the public finances ‘inevitably means difficult decisions have to be taken’, and that businesses will consider a freeze in the national insurance contribution (NIC) thresholds and additional windfall taxes as ‘the sharpest stings in the tail’.

Rain Newton-Smith, Chief Economist at the CBI, said:

‘The Autumn Statement lays down an important marker for the direction of the country. Business will work with government to turn [the] ambitions into a serious plan for growth that can lift us all out of the current crisis.’

Internet links: CBI website

Chancellor of the Exchequer Jeremy Hunt has delayed the announcement of the government’s economic plan until 17 November.

The Medium-Term Fiscal Plan was due to be delivered by the Chancellor in the Commons on 31 October, along with a forecast from the Office for Budget Responsibility.

This had been brought forward because of the market turmoil that followed September’s Mini Budget.

But it will now be put back by more than two weeks and be turned into a full Autumn Statement – expanding its remit and providing longer term plans.

The delay followed the reversals of most of the measures announced in the recent Mini Budget.

Mr Hunt announced that the following tax policies will no longer be taken forward:

• cutting the basic rate of income tax to 19% from April 2023. The basic rate of income tax will remain at 20% indefinitely.
• cutting dividend tax by 1.25 percentage points from April 2023. The 1.25 percentage point increase, which took effect in April 2022, will remain in place.
• repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. The reforms will remain in place.

The changes follow decisions not to proceed with proposals to remove the additional rate of income tax and to cancel the planned rise in the corporation tax rate.
Mr Hunt said:

‘Our number one priority is economic stability and restoring confidence that the United Kingdom is a country that pays its way. But it is also extremely important the statement is based on the most accurate possible economic forecasts and forecasts of public finances.’

Internet links: GOV.UK

The UK’s new Prime Minister Rishi Sunak must restore confidence in the country’s economy, say business groups.

Mr Sunak will have to deal with a range of issues stemming from inflation and the cost-of-living crisis.

Business groups say he will need to set out plans to deal with soaring energy bills, labour shortages, spiralling inflation, and climbing interest rates.

Shevaun Haviland, Director General of the British Chambers of Commerce (BCC), said:

‘The new Prime Minister must be a steady hand on the tiller to see the economy through the challenging conditions ahead.

We cannot afford to see any more flip-flopping on policies – the UK’s businesses need a sustainable, long-term economic plan they can believe in.

We need a clear long-term vision of how the new Prime Minister will deal with the challenges ahead and create the business conditions that allow firms, and the communities that rely on them, to thrive.’

The BCC says business need more certainty on the energy support package for businesses and how the system will work from April.

In addition, it says the government must set out a strategy to boost international trade and exports.

Tony Danker, Director-General at the Confederation of British Industry, said:

‘The new Prime Minister can lose no time in easing the impact of market turmoil on households and firms, and helping to restore fiscal credibility.’

Internet links: BCC website CBI website

The rate of inflation rose to 10.1% in September as the economy felt the effects of rising prices and the fallout from the Mini Budget, according to the Office for National Statistics (ONS).

The ONS said the Consumer Prices Index (CPI) measure rose from an annual rate of 9.9% in August to match the recent 40-year high seen in July.

The report showed that the largest upwards contribution came from food costs, while fuel provided the greatest downside pressure. It said the pace of food price rises was at its highest since April 1980 – running at an annual rate of 14.6%.

Commenting on the figures, Martin Sartorious, Principal Economist at the Confederation of British Industry (CBI), said:

‘Inflation returned to its recent 40-year high and is expected to grow further in October as energy bills rise in line with the government’s Energy Price Guarantee.

‘While the Chancellor’s statement (on 17 October)seems to have restored some fiscal stability, adjustments to the Energy Price Guarantee suggest inflation may yet remain higher for longer.

‘The prospect of household energy bills rising sharply again in April 2023 emphasises the need for the government to set out the details of any future targeted support sooner rather than later, in addition to how the country will establish its longer-term energy security.’

Internet link: ONS website