UK private sector outlook hits lowest since 2022 – CBI

UK businesses expect output to decline over the next three months, marking their most pessimistic outlook since September 2022, Reuters reported on Monday citing the Confederation of British Industry (CBI).

The CBI’s output expectations balance fell to -30 in May from -21 in April, as private sector activity dropped to -26 in the three months to May, down from -19 previously. The survey cited rising payroll costs and global trade headwinds as major concerns.

“Firms highlight numerous headwinds: the continued impact of higher employer National Insurance Contributions and the National Living Wage hike on their costs and operations,” said CBI deputy chief economist Alpesh Paleja.

The £25 billion hike in employer social security contributions and a near 7 per cent rise in the minimum wage are expected to drive job cuts over the next quarter.

The gloomy CBI figures contrast with a separate Institute of Directors survey, which showed business confidence at its highest since August 2024, though still in negative territory.

Despite stronger-than-expected growth in early 2025, the Bank of England has warned of modest risks from newly imposed US tariffs, as Finance Minister Rachel Reeves prepares to unveil a multi-year public spending review on June 11.

Attribution: Reuters
Subediting: M. S. Salama