Consumers in the north face paying even higher prices for goods and services in 2025 on the back of the Autumn budget, two new studies suggest.
New research from the Northern Ireland Chamber revealed 90% of firms are under pressure to put their prices up, principally because of rising labour costs.
It followed the increase in employers’ national insurance contributions announced by UK Chancellor Rachel Reeves in her October 30 budget.
The latest quarterly study carried out by the NI Chamber suggests 79% of businesses in the north believe the budget will negatively impact their business.
The research, conducted just two weeks after the Autumn Statement, found Labour’s first budget in 14 years had an immediate impact on businesses, with the increase to employers’ national insurance contributions soaring to the top of the list of concerns.
Of the 143 respondents to the survey, 74% said they were either ‘highly’ or ‘very concerned’ about the changes.
Some 45% also said they were ‘highly/very concerned’ about the increases to the national living wage from April 2025.
A separate study published by the Northern Ireland Retail Consortium (NIRC) today, estimates the changes to national insurance will add around £106 million a year to the annual outgoings of retailers in the north.
NIRC director Neil Johnston said retailers are also braced for an increase in business rates later this year.
“These expensive statutory costs are set to tighten the fiscal screws on the industry in 2025 and cannot simply be absorbed,” he said.
“This will have direct consequences for staffing levels, commercial investment and the viability of stores, and for prices charged to customers.”
His comments are supported by the NI Chamber’s survey, where 61% of businesses said the budget will negatively impact investment plans.
A snapshot of the feedback provided by business owners show some firms had already scaled back recruitment and put plans to expand their premises on hold.
Another company said it was looking to outsource some work to India due to the increase in minimum wage and national insurance costs.
NI Chamber chief executive Suzanne Wylie said the research outlined “the significant implications” of the recent budget.
“Whilst many of our very resilient members remain optimistic about their business prospects for the year ahead, the consequences of the alarming acceleration of the tax burden on businesses are deeply concerning and are likely to have significant longer-term implications once they take effect from April,” she said.
“While businesses acknowledge the need to stabilise public finances and support investment in public services, in the absence of material growth, the increased tax burden, with significant increases in employer NICs, will add to already high business costs.”
Brian Murphy, managing partner at BDO NI, which produces the quarterly survey with the NI Chamber, said: “Since this survey was conducted, we have witnessed further challenges in the markets, which may impact business confidence.
“However, it is important to reflect on the fact that although the Autumn Budget has created concerns for local businesses, the vast majority still believe they will trade positively in 2025, with half planning for – and anticipating – growth.”
