New forecasts are downgrade Economic development forecast For a blow for US tariff and high cost Chancellor.
Union of British industry (CBI) said that rising costs lead to “weak” business investment and moist on the government’s ambitions to accelerate the UK economy,
Trading body Latest economic forecast Indicated that the UK economy is on track to increase by 1.2 percent this year. It predicted an increase of 1.6 percent earlier.
It also dropped its development forecast for 2026 from 1.5 percent to 1 percent.
This highlighted that the UK has seen a strong growth at the beginning of the year, increasing by 0.7 percent in the first three months of 2025.
But it suggested that the underlying activity “remains dull” due to the constant weak demand and sad spirit between businesses.
The CBI said that the high employment cost of autumn budget, including national insurance contribution and increased national minimum wages, has affected the firms.
It said that it has been fed in high pricing and has reduced capital expenditure and hired between many firms.
Shadow Chancellor Mail Strued said: “CBI warning is clear – Labor’s jobs are killing high employment cost development.
“This follows the IFS warning that no decrease in the forecast of development almost increases more tax”.
“Today Today, Tax Tumoro ‘Chancellor, Rachel Reaves told the CBI that he is’ not returning with more borrowings or more taxes’ – but he has put himself in a corner and we know that now he has’ a secret plan to increase taxes’.
“Don’t make any mistake – more taxes are coming.”
Meanwhile, the higher American tariffs of President Trump’s administration have also made headwinds for export to the US and have hampered investment from multinational companies in the UK.
This Donald Trump and the Prime Minister come to the G7 summit in Canada earlier this week after finalizing the US-AK deal with the aim of reducing trade obstacles on goods of the two countries.
CBI Chief Economist Louis Helm said: “Our latest economic forecasts underlines the challenges faced by businesses and comprehensive economy as they are buffer by domestic and global headwinds.
“Unexpected global outlooks jointly with the intentions of increasing employment costs, depressed trade spirit, and control, it is more important that it is more important than ever that the government pulls all the livers that can set the UK on a route for sustainable development.
“To remain modest in 2026 with GDP (GDP), the government has an important opportunity to set the development agenda on fire in the upcoming industrial strategy.
“With the cumulative burden of costs being felt by the firms in the economy, it is important that the industrial strategy helps to run a prosperous environment for all businesses.”
