Business owners question credibility of growth forecasts amid mounting pressures

For many listening to the Chancellor’s latest address, the economic outlook may have sounded cautiously optimistic. But among business owners on the ground, the mood is markedly different. “I genuinely believe I am living in a completely different economy to her,” said one listener, voicing a sentiment that is gaining traction well beyond Westminster.

Concerns are intensifying around the credibility of official forecasts. In October, the Office for Budget Responsibility (OBR) projected UK GDP growth at 2% for 2025. That estimate has now been sharply downgraded to just 1%. For business leaders, this abrupt revision raises questions not just about the robustness of the models, but about how in touch these institutions are with economic realities. “Why should anyone believe their growth rates for the next four years when they can’t get it right over six months?” the business owner asked.

At the core of the discontent is a sense of detachment between government rhetoric and lived experience. While policymakers point to future growth, many on the frontline — particularly in the hospitality, retail, and charity sectors — report persistent stagnation. “We have stagflation,” one observer noted. “And that will be made worse with the National Insurance tax increases, which haven’t even come into place yet.”

The private sector, which the Chancellor has repeatedly referred to as a driver of growth, is facing mounting obstacles. The introduction of higher minimum wage levels and expanded workers’ rights has drawn support in some quarters, but also concern over unintended consequences. “With these new costs,” one employer asked, “who is going to risk employing young, inexperienced, or disabled workers?”

In sectors such as construction, the gap between ambition and feasibility appears particularly stark. The government’s pledge to build 1.5 million new homes is under scrutiny, not only because of the scale but due to structural constraints. Persimmon, one of the UK’s largest housebuilders, is expected to complete just 11,500 homes this year. Meanwhile, many smaller firms are struggling to remain viable amid rising costs and a shortage of skilled workers and raw materials.

The frustrations extend into employment policy. While the government has reiterated its goal of reducing welfare spending by encouraging people back into work, business owners question whether current conditions will enable this. “How will the government get people back into work,” one asked, “when the costs and risks of hiring are only increasing?”

Across the country, a picture is emerging of an economy under strain:

• Growth is down

• Job creation is faltering

• Investment is slowing

• Planning decisions are stagnating

• Business rates are rising

• Inflation remains stubborn

• Rents are climbing

• Unemployment is edging up

• More businesses are entering distress

• Administrations are increasing

For many, this isn’t a list of abstract indicators — it is the day-to-day reality of running a business in the UK. The gap between the economic story told in parliament and the one unfolding in high streets and industrial estates continues to widen. For policymakers, reconnecting with that reality may prove crucial if future forecasts are to inspire confidence rather than disbelief.