More than half of private sector firms are planning price hikes to help offset looming tax increases announced in the chancellor’s first budget , according to a corporate lobby group.
The British Chambers of Commerce (BCC) warned business confidence was at its lowest level since the market meltdown that followed the Conservatives’ mini budget of autumn 2022.
Its survey of almost 5,000 firms found worries about tax stood at levels not seen since 2017.
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Labour had fought a growth-focused election on the back of an improved working relationship with business but there was a widespread sense of shock when the 30 October budget put businesses on the hook for the bulk of £40bn of tax increases.
The new government argued the hikes were necessary to lock in long overdue investment in public services due to an alleged black hole in the public finances inherited from the Tories.
But companies widely warned the higher costs, from measures such as higher employer National Insurance contributions and National Living Wage increases from April, would be passed on to customers and hit wage growth, employment and investment.
At a time when the Bank of England is struggling to cut interest rates due to stubborn cost pressures in the economy, there will be concern among policymakers over the threat posed by potential business price hikes ahead.
The BCC survey found 55% of companies were planning to raise their own sales costs.
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Such a move would threaten further upwards pressure on inflation while weak business confidence will also do little to lift the economy out of the doldrums witnessed during the second half of 2024 when government warnings of a “tough” budget ahead were widely blamed for hitting sentiment.
Financial markets currently see just a 60% chance of a Bank rate cut at the next meeting in a month’s time.
BCC director general Shevaun Haviland said: “The worrying reverberations of the budget are clear to see in our survey data. Businesses’ confidence has slumped in a pressure cooker of rising costs and taxes.
“Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging. Businesses are already cutting back on investment and say they will have to put up prices in the coming months.
“The government is rightly coming up with long-term strategies on industry, infrastructure and trade. But those plans won’t help businesses struggling now.
“Business stands ready to work in partnership to make the proposed Employment Rights legislation work for all, but the current plans will add further costs on firms.”
The BCC said the government could help firms absorb the additional pressures in areas such as business rates reform and through infrastructure investment.
A Treasury spokesperson said in response: “We delivered a once in a parliament budget to wipe the slate clean and deliver the stability businesses so desperately need.
“We have ensured more than half of employers will either see a cut or no change in their National Insurance bills, and by capping the rate of corporation tax at the lowest level in the G7, creating pension megafunds and establishing a National Wealth Fund, we are bringing back political and financial stability, creating the conditions for economic growth through investment and reform.
“This is just the start of our Plan for Change which will unlock investment, get Britain building via planning reform, and employ a modern Industrial Strategy to deliver the certainty and stability businesses need to invest in the UK’s growing and high potential sectors. This will make all parts of the country better off.”
A 32-year-old woman is cancer-free after undergoing the UK’s first liver transplant for advanced bowel cancer.
Bianca Perea, a trainee lawyer from Manchester, was diagnosed with the most advanced kind of bowel cancer in November 2021, with doctors telling her they aimed to prolong her life rather than find a cure.
But, alongside other treatments including targeted drug therapy, chemotherapy and surgery, the transplant has been a huge success and Ms Perea now has no signs of cancer anywhere in her body.
Ms Perea first visited her GP in Wigan after feeling constipated and bloated. After tests, a colonoscopy and a biopsy, she was diagnosed with stage four bowel cancer, which had spread to all eight segments of her liver.
Ms Perea accepted the diagnosis, but said she refused to believe the outlook was so bleak.
“I don’t want to sound kind of ignorant or arrogant or anything like that but I just didn’t feel in my gut that that was going to be it,” she said.
Her mother asked about a possible transplant at that stage but was told it was not a feasible treatment.
Ms Perea had 37 rounds of a targeted drug called panitumumab plus chemotherapy for two and a half years.
She had an excellent response to the treatment, which meant she was able to have an operation in May 2023 to remove the bowel tumour.
But scans showed she still had tumours in her liver, which could not be operated on.
Bianca with her beloved dog. Pic: PA
Nevertheless, because her response to chemotherapy had been so good and her bowel cancer was seemingly gone, doctors began to look at liver transplants.
Ms Perea was added to the transplant list in February 2024 and was lucky enough to find a donor last summer.
An NHS Blood and Transplant Small Human Organ in Transit box at St George’s Hospital in Tooting, west London. File pic: PA
She said: “Within four weeks of going under the knife, I was able to drive and walk the family dogs, it was really quite incredible.
“To go from being told I’d only have a short time to live to now being cancer-free is the greatest gift.
“I’ve been given a second chance at life and I’m going to grab it with both hands. I am so grateful to the family who agreed to donate their loved one’s liver.
“I do believe this is a cure. They’re always hesitant to say that, obviously, but I am cancer-free right now.”
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Now, Ms Perea is looking forward to going on holiday this year and is working on improving her fitness.
“My liver is doing really well,” she said. “I get tests on that, and I’ve just had my second scan and that’s all clear, so it’s really good.”
Dr Kalena Marti, Ms Perea’s oncologist, said: “To see that Bianca has had such a positive outcome is wonderful.
“When we looked at the tumour cells in her liver after it had been removed, they weren’t active.
“This is excellent news, and we hope that this means that the cancer won’t come back.”
She added: “Advanced bowel cancer is complex and there are lots of different types of the disease, so what works for one person might not work for another. As a result, it’s important that we continue to develop new treatments.
“Thanks to the generosity of organ donors and their loved ones, we can now access liver transplants for some patients, which is fantastic.”
You can watch a full interview with Ms Perea at 8.30am this morning on Sky News Breakfast.
Environment
Tesla posted record China sales in 2024. But this year is going to be tough as competition heats up
Tesla models Y and 3 are displayed at a Tesla dealership in Corte Madera, California, on Dec. 20, 2024.
Justin Sullivan | Getty Images
Electric vehicle-maker Tesla’s sales in China climbed to a record high last year. Sustaining that performance in 2025 could prove tricky as competition with homegrown players intensifies, analysts said.
The U.S. electric vehicle maker saw annual sales in China jump 8.8% to a record high of more than 657,000 cars in 2024. In December alone, its sales rose 12.8% from the previous month to 83,000 units, according to Tesla China.
However, Tesla has been losing market share to Chinese new-energy-vehicle players, down from 7.8% in 2023 to 6% in the January to November period last year, according to Bill Russo, founder and CEO of Automobility, who believes Tesla is “struggling to keep pace [with domestic rivals] and has a limited and aging product portfolio.”
Brand resiliency and price cuts have supported Tesla’s sales so far, said Tu Le, founder and managing director of Sino Auto Insights, but he was less certain that Tesla could keep up its momentum in 2025, given the lack of new products and increased local competition, especially from Chinese companies.
Aggressive price war
Tesla slashed the price for its best-selling Model Y in China by 10,000 yuan ($1,364.5) in late December and extended a zero-interest five-year loan plan for car buyers until the end of January.
Its best-selling Model Y now starts at 239,900 yuan after the discount, while the Model 3 sedan starts at 231,900 yuan — Tesla had cut its prices by 14,000 yuan in April — according to its website.
Still that marked a significant premium over a swath of cheaper models offered by Chinese domestic carmakers. BYD, which dominated the market with around 34% market share, prices one of its best-selling models Seagull at 136,800 yuan, and the more affordable Yuan Plus model, starting at 96,800 yuan.
TOPSHOT – People look at a BYD Seagull car by Chinese electric vehicle (EV) manufacturer BYD Auto at the Bangkok International Motor Show in Nonthaburi on March 27, 2024. (Photo by Lillian SUWANRUMPHA / AFP) (Photo by LILLIAN SUWANRUMPHA/AFP via Getty Images)
Lillian Suwanrumpha | Afp | Getty Images
As the price war extends into the new year, Li Auto introduced cash subsidies of 15,000 yuan per purchase along with a three-year zero-interest financing scheme, according to a post last Thursday on its social media Weibo account. Nio also extended a similar three-year zero-interest loan plan for its EV buyers.
The purchasing incentives came on top of Chinese authorities’ push to extend the consumer goods trade-in program, which subsidizes consumers to trade in old cars or appliances and buy new ones at a discount.
The government-subsidized trade-in program could further lower prices for both Model 3 and Model Y by up to 50,000 yuan, Tesla China said.
“Tesla has to discount aggressively to keep pace with the ongoing price war in the market,” Russo noted.
Despite dwindling market share, Tesla is unlikely to lose its ground completely in China, according to Joe McCabe, CEO and president of AutoForecast Solutions, who compared Tesla as “the Apple of cars” — an “early adopter” in the EV space with “phenomenal” technology.
“I don’t think Tesla is at risk of not surviving,” McCabe added, “all [Elon Musk] has to do is drop the price by 5%, because he can, and that will help for little blips.”
Head-to-head race
In addition to lowering prices, Chinese electric carmakers have rolled out a slew of new models, many with fancy in-car features, such as projectors, embedded refrigerators and driver-assist systems.
Meanwhile Tesla has been slow in adopting any of these features, with its product portfolio focused solely on fully electric vehicles, while its homegrown rivals have steered into plug-in hybrid cars and extended-range EV categories.
These more traditional models appeal to buyers who are “still worried about the leap to fully electric [cars],” Sam Fiorani, vice president of AutoForecast Solutions said. “Tesla has no plans for anything other than fully electric vehicles.”
The automaker’s plans of launching its full self-driving supervised system still hinges on regulatory permission in China, while several local competitors have made the advanced driver-assistance systems a basic part of their offering, including BYD.
Musk had warned in January that Chinese automakers could “demolish most other car companies in the world” unless regulators intervene with trade barriers, as the Warren Buffet-backed BYD overtook Tesla as the world’s top-selling EV company in the last quarter of 2023.
The U.S. imposed a 100% duty on Chinese EVs last September to protect its homegrown industries from the pricing pressure posed by heavily-subsidized peers from China. The European Union has also moved to impose tariffs as high as 45.3% on Chinese EV cars imported late last year, while Tesla enjoyed a lower tariff rate of 7.8%.
The trade barriers would force Chinese automakers to find buyers at home and in the “smaller, friendlier” foreign markets, adding pressure on Tesla’s sales in China and elsewhere, Fiorani added.
Tesla’s sales of China-made EV cars including exports to foreign markets fell modestly by 0.4% from a year ago to 93,766 units in December, according to CNBC’s calculation of China Passenger Car Association data.
BYD, which is subject to 17% tariff duties for car exports to European Union, still led the rank with 509,440 cars sold in December, a near 50% year-on-year jump.
—CNBC’s Evelyn Cheng and Sonia Heng contributed to this report.
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