CBI issues Pre-Budget warning on profits

The Confederation of British Industry (CBI) has warned that the amount earned by UK businesses as a share of GDP has seen a 'worrying' decline since 1997.

In the CBI's submission to the Chancellor's Pre-Budget Report, the business organisation said that the soaring costs of oil, energy and metal were partly to blame for the decline in profits.

However, the report highlights the fact that tax and regulation have also had a significant effect, and urges the Government not to increase taxes and red tape for businesses.

CBI director general Digby Jones warned that the decline in profits would have a knock-on effect on pensions, schools and hospitals.

'We have been through a period of profitless prosperity with firms not making as much money as in previous economic upswings. Ministers and voters alike must realise that this is not merely a business issue', he said.

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