Top retail boss warns UK heading into recession
The boss of AO World has warned that inflation, new red tape around hiring and higher taxes are quickly pushing the UK into a recession.
“We’ve lived through a few recessions in the last 25 years – I think we’re heading into another one,” founder and CEO of AO World, John Roberts, told the BBC.
“We have inflation coming through and we are now feeling that in the costs across businesses… Business leaders that I speak to are looking at how they can take people out.
“Costs walk into businesses on legs – those legs have got much more expensive. It is much more difficult to recruit people, it’s much less flexible than it has ever been to recruit people,” Roberts said.
Inflation hit 3.8 per cent in August, while the UK’s largest retail lobby has warned that tax hikes in the upcoming Autumn budget would push inflation over five per cent “well into 2025”.
Roberts also warned that the government is driving wealth out of the country through higher taxes: “What I really object to is the narrative that you can just keep taxing wealthy people and wasting the money. We are driving incredible amounts of wealth out of this nation.
“I know many people that have left the UK. You just can’t keep gearing the tax up. What you’ve got to do is run the country efficiently, you’ve got to take the tough decisions.”
Roughly a quarter of wealthy foreigners with foreign-held trusts left in response to last year’s Autumn budget.
‘We should be turbo-charged by government’
Roberts was particularly critical of the workers’ rights bill, which will controversially give employees ‘day one’ rights – allowing workers the same employment protection as longer-serving colleagues from the moment they start a job.
“We should be talking about job creation, not enforcing things that make business leaders think twice about recruiting people and about giving somebody a chance,” he said.
“If the risks associated with giving those people a chance start going up exponentially then you think twice about it. We can’t carry costs that some of our competitors are not carrying. We should be turbo-charged by our UK government, not disadvantaged.”
He added that welfare spending has “ballooned out of control”, with Starmer’s unsuccessful bid to cut the number of Brits eligible forcing an embarrassing U-turn earlier this summer.
“When it actually comes down to the MPs with a massive majority doing the right thing for the nation, they back out of it,” Roberts added. “Why do they back out of it? Because ‘I might not get elected again’.”
Recessions warnings grow
The warning from Roberts follows a spate of high-profile alarm bells: Next boss Lord Wolfson last week said Britain faced years of “anaemic growth” and warned more tax increases would have a “demonstrable negative impact”.
City Veteran Lord Stuart Rose similarly said that the UK is “on the edge of a crisis” and that he was “worried” about the country.
“We have got no growth in the economy. If you have no growth in the economy, you’re not creating any wealth. If you haven’t got any wealth, you can’t put into the nation the services that voters want and voted for. So, we’ve got to change tack.
“There isn’t a direction of travel. There is no travel. We’re not travelling anywhere. We’re actually standing still in a lay-by while we decide what to do. That’s the real problem,” he told Times radio.
Economic data, too, promises a concerning Autumn: Business activity expectations for the year ahead slumped to a three-month low in September. Hiring, too, has slumped since last October.
Chris Williamson, chief business economist at S&P said the latest figures “brought a litany of worrying news including weakening growth, slumping overseas trade, worsening business confidence and further steep job losses”.