Business group calls for clarity over government support

A business group is urging the UK and Scottish governments to make clear what support they will give firms in the face of "a looming recession".

The Scottish Chambers of Commerce said the economy was "struggling against a growing whirlwind of pressures".

It added that frozen investment, faltering confidence, falling cashflow and profits "paint a concerning picture" for businesses in Scotland.

The call came as it published its latest quarterly business survey.

In the survey, energy bills were cited by firms as the top cost pressure, followed by labour and fuel costs, while about 90% of respondents expressed concern over inflation.

Firms also reported a fall in confidence, compared with the previous quarter.

Eighty per cent of the survey's 280 respondents said they intended to raise prices in the next quarter in the face of increased costs and inflationary pressures.

Earlier this month, a report by an economics think tank suggested that Scotland's economy was likely to be already in recession.

The Fraser of Allander Institute said economic output was falling for a second quarter and forecast it would continue until the end of 2023.

Commenting before Prime Minister Liz Truss announced her resignation on Thursday, Scottish Chambers of Commerce (SCC) president Stephen Leckie said there was "more pressure to come" in the winter months.

He said: "The signs of an economic bounce-back don't look promising as more and more firms are telling us that they have been forced to cancel contracts, projects or plans to expand, due to soaring costs and difficulty in hiring people.

"Whilst we recognise the strain that has been placed on the public finances, governments in Edinburgh and London must make clear how businesses will be supported to survive through the difficult months ahead and what measures will be put in place to support long-term growth."

SCC is urging UK Chancellor Jeremy Hunt to "provide clarity" on the proposed targeted support for energy bills beyond April and set "a clear long-term economic prospectus to provide a stable environment for investment".

He is due to publish his medium-term fiscal plan on 31 October.

SCC also wants the Scottish government, which is expected to set out an emergency budget review next week, to ease cost burdens on firms. Its recommendations include a cut in non-domestic rates.