As highlighted by Delphine Strauss in “UK wage growth steadies as hiring stalls”, pressures in the labour market are easing - some much-needed positive news for UK businesses. However, we must not let this obscure the impending headwinds.
With rising employment costs due to higher National Insurance contributions and increased minimum wage, an ever-growing compliance and administrative burden, geopolitical uncertainties, and the potential resurgence of inflation, the outlook for 2025 appears turbulent. While the government emphasises investment, growth, and productivity, many business leaders and their finance teams in the private sector are more focused on cost management, cash-flow, margins, consolidation, and deferment to keep their organisations viable for 2025 and beyond.
Any assumption that private sector growth will complement public sector investment seems incompatible in the near-term when businesses are adjusting financial projections, investment decisions, and budgets to manage rising costs and survive beyond the coming months.
Andrew Harding, FCMA, CGMA
Chief Executive - Management Accounting