CBI reports fall in business confidence will affect UK jobs
Sunday, 20 November 2011 11:35
The CBI has released a new business survey that reveals a big drop in business confidence amongst the UK’s most influential business leaders ahead of the CBI’s annual conference that begins tomorrow.
The report reveals that business confidence has collapsed and that a third of the 122 top business people interviewed admitting that they are looking to cut staff numbers. Seventy per cent of those interviewed said that they felt the economic outlook had worsened since August.
Unemployment figures released last week showed that there were 305,000 fewer people employed during the period July to September. Three out of five of the leaders surveyed said that they planned to revise their business strategy and 38 per cent admitted that they were going to change their staffing plans.
The director general of the CBI, John Cridland believes that the corrosive effect of the ongoing euro debt crisis has stymied the ability of firms to build confidence.
Mr Cridland said: "The survey shows that business confidence has been hit by the Eurozone crisis and fears of a second banking crisis in 2012, so firms are revising their investment and employment plans. Business leaders believe the Government is right to stick to its deficit reduction strategy, but that it must go hand-in-hand with some fresh thinking and a more creative growth strategy."
Mr Cridland’s comments are designed to put some pressure on the Chancellor, George Osborne to announce some tangible measures in his autumn statement later this month to encourage growth and restore business confidence.
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Mr Cridland added: "The chancellor needs to use his autumn statement to boost business confidence with game-changing new ideas."
Measures that could be announced by Mr Osborne include increasing the use of credit easing to help increase lending to small businesses, a national infrastructure plan and a government-backed mortgage guarantee scheme to help first-time buyers.
The Treasury has stated that the deficit reduction policy followed by the coalition government has placed the UK “ahead of the curve” in dealing with the debt.
A Treasury spokesman said: “Other countries have not taken these difficult decisions and are now feeling the effect of weakened market confidence."
This view appears to be shared by the majority of business leaders. John Cridland said: “Despite the sharp fall in confidence and the increase in economic uncertainty, 82% of business leaders are firmly behind the Coalition Government's deficit reduction strategy and do not believe that it should be scaled back."
However, Chuka Umunna, the shadow business secretary said: “The government’s decision to cut spending and raise taxes too far and too fast has undermined business confidence, held back growth, stalled job creation and left Britain’s economy dangerously exposed.”
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