Labour squeeze and soaring costs compound to hit UK businesses

The ongoing labour squeeze, soaring costs and uncertainty over the economic landscape since the emergence of Omicron are compounding to hit British businesses, reveals a new survey published today.

Growth among UK private sector firms slowed to 21 per cent in the three months to December, down sharply from 32 per cent in the last quarter, according to the Confederation of British Industry (CBI).

That is the slowest rate of growth since April when the UK economy was still in the teeth of tight Covid-19 restrictions.

Alpesh Paleja, lead economist at the CBI, said: “Substantial challenges remain for businesses heading into Christmas: labour and materials shortages, rising costs and new Covid measures are restricting business’ ability to trade during this crucial period.”

“With uncertainty rising – associated with the sharp rise in Omicron cases – it’s no surprise that the near-term growth outlook has dampened,” he added.

Prime Minister Boris Johnson this week ruled out imposing tighter measures on economic activity to curb the spread of Omicron before Christmas.

However, he has warned the UK government is ready to launch tougher curbs after Christmas if data on the new strain does not improve.

Yesterday, the UK reported more than 100,000 Covid-19 cases for the first time since the onset of the pandemic.