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Large UK Companies To Scale Back Hiring And Investment Amid Tax Increases

by THEFUTURE.TEAM

January 14, 2025

Large British businesses are preparing to slow hiring and reduce investments at the fastest pace since the COVID-19 pandemic, according to a report released by Deloitte on Monday. The survey points to the impact of substantial tax increases introduced in the government’s October budget, which include a £25 billion ($31 billion) rise in employers’ social security contributions.

Deloitte’s quarterly survey, conducted with 63 of the UK’s largest companies, reflects broader trends also seen in smaller and medium-sized businesses grappling with the tax hike. As cost control becomes a priority, the survey indicates that chief financial officers (CFOs) are scaling back their expectations for corporate investment, discretionary spending, and hiring over the next 12 months.

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Ian Stewart, Deloitte’s chief economist, noted, “With cost control to the fore in the wake of the budget, CFOs have trimmed expectations for corporate investment, discretionary spending, and hiring in the next 12 months.”

The survey, conducted from December 3 to December 16, did not account for the recent drop in sterling and the spike in 30-year government bond yields, which have reached their highest levels since 1998. These developments have raised concerns about an economic slowdown since the government’s budget announcement.

Employment intentions among businesses have seen the steepest decline since early 2020, and plans for capital expenditure are at their weakest since Q3 2023. Companies are also showing less appetite for taking on risk, with CFOs showing the least confidence in the economy in more than a year.

Despite this, business optimism has dipped to a two-year low, although the overall sentiment is not as negative as the lows witnessed in 2022 or 2020, according to Deloitte’s findings. While CFOs still consider the UK a more attractive investment destination than the eurozone, the gap has narrowed, with Europe trailing behind the United States as the preferred choice for investment.

In a separate survey, manufacturing trade body Make UK revealed that 57% of manufacturers would consider increasing investment once the government provides further details on its long-term industrial strategy, expected in the first half of 2025.

Stephen Phipson, Chief Executive of Make UK, emphasized the urgency of the government presenting clear and immediate priorities as part of the industrial strategy. He believes it could help boost business confidence and set a positive tone for the year ahead.

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Only 1% Of Cyprus Farms Use Precision Farming Technologies

Cyprus remains one of the European Union’s least digitised agricultural economies, with just 1% of farms using precision farming technologies in 2023, according to Eurostat.

The findings come as the EU continues to encourage the adoption of digital tools aimed at improving agricultural productivity, efficiency and sustainability.

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Internet Access Expands, But Digital Uptake Lags

Internet access has improved across the bloc, although adoption remains uneven. Eurostat found that 43% of EU farms had internet access in 2023, with northern and central European countries leading the way.

Denmark, Germany, Slovakia, Latvia, the Czech Republic and Austria all reported internet access rates above 90%.

Greater connectivity, however, has not translated into widespread digital adoption. Farm management information systems, which help farmers manage day-to-day operations, were used by only about 11% of EU farms. France was a notable exception, with around 60% of farms using the technology.

Precision Farming Concentrated In Larger Operations

Robotics adoption also remained relatively limited, with only about 7% of EU farms using robotic technologies. Overall, around 18% of farms with utilised agricultural area employed at least one precision farming technology or practice in 2023.

These included robotics for plant protection, band spraying, variable-rate application, precision crop monitoring and soil analysis. Despite representing fewer than one in five farms, these holdings accounted for around 44% of the EU’s utilised agricultural area.

The figures suggest that precision farming remains concentrated among larger agricultural businesses, where investment in digital technologies is typically easier to support.

Cyprus Lags Behind EU Leaders

Luxembourg, Finland and Estonia recorded the highest shares of utilised agricultural area managed by farms using precision farming technologies, each exceeding 75%.

At the other end of the ranking, Cyprus recorded just 1%, while Greece and Romania reported between 10% and 15%. The results indicate that Cyprus remains at an early stage of digital adoption in agriculture, even as precision farming becomes more widespread across parts of the European Union.