The latest Business Confidence Monitor from ICAEW predicts that costs will continue to rise as inflation and commodity prices increase further.
Stephen Ibbotson, ICAEW director of business, said, “Firms will try to pass many of these increases on to their customers, which means that 2017 is likely to be a year of counting the pounds and pennies for consumers following an unsustainable spending spree towards the end of last year.
“In order for businesses to start the New Year off confidently, the government should resolve the ‘Hard Brexit Vs Soft Brexit’ debate in Parliament as quickly as possible and negotiate the most inclusive Brexit deal for business of all shapes and sizes across the UK.”
Capital investment experienced the slowest growth for three years while R&D spending has only grown moderately.
Employment growth, profit growth and real wage growth are expected to slow over the next year as business wait until they see what Brexit will mean.
Property and retail took the biggest hit to confidence over Q1 due to a difficult Christmas period.