UK Businesses Pause Investment and Hiring Plans Over Iran Conflict

UK businesses are delaying investment and hiring decisions as costs rise during the ongoing conflict involving Iran, according to surveys released this month. More than two months into the conflict, a BDO survey found over half of medium-sized businesses identifying higher energy and fuel costs plus supply chain pressures as their primary concerns.

The accountancy firm reported that companies are focusing on cost control rather than expansion.

A Chartered Institute of Personnel and Development report showed almost 60 percent of employers naming costs as their top priority. The report linked the pressure to higher energy and supplier bills along with increased labour costs from last year’s employer national insurance rise and minimum wage increases.

6 percent from April last year. Job postings fell most sharply for pilots, travel agents and train drivers.

Reeves is scheduled to meet G7 finance ministers in Paris this week to discuss coordinated measures addressing the economic effects of the conflict. The government is also preparing further support measures for households and businesses. 3 percent GDP growth in March, according to Office for National Statistics data.

Economists noted that some of the growth may reflect businesses and consumers building inventories ahead of possible supply disruptions. Richard Austin, a partner at BDO, said companies were struggling to absorb the latest economic shock amid global and political uncertainty.

Neil Carberry, chief executive of the REC, said the labour market is entering a more unpredictable phase after a solid start to the year.