My business predictions for 2025

Headed for ‘the worst of all worlds’ is not where any of us would wish to find ourselves at the start of the new year. But that was the phrase used by the CBI economist Alpesh Paleja to sum up the predictions of member businesses – of reduced hiring and output, rising prices and weak growth. Since that survey, a revision to zero of the official growth figure for the third quarter of 2024 and reports of depressed pre- and post-Christmas consumer spending have provoked even darker whispers of a return to recession. Whence cometh such pessimism?

Has it bubbled out of the Tories’ black hole of fiscal shame? Can we blame the Bank of England and the Treasury ‘blob’? Or the rare alignment of planets that’s expected in three weeks’ time? Or ‘Rachel from Accounts’, as City wits now habitually refer to the Chancellor in recognition of the heights of her past banking career?

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Let’s face it, no one could claim that Rishi Sunak left a golden economic legacy, even though growth in the last two quarters of his tenure, at 0.7 followed by 0.5 per cent, was relatively robust. Likewise no one holds bouquets for Governor Andrew Bailey of the Bank, even though inflation eventually took the path he predicted and continues to do so, including the current uptick. And of course recent global (rather than celestial) events have been as unhelpful as they so often are.

But the plain truth is that the Prime Minister’s relentlessly downbeat narrative since July, the double-speak of his avowed commitment to growth, the absence of positive policy ideas, and finally Reeves’s anti-enterprise October Budget, have fuelled the frankly-why-bother mood of business reflected in the CBI survey.