Exeter businesses react to Budget 2025 as rising costs spark concern

Exeter businesses are preparing for today’s Budget (26 November) amid rising costs, inflationary pressures, and uncertainty over taxes and wages. 

Many say the lack of clear guidance makes it difficult to plan investment and growth for the year ahead.

According to the Office for National Statistics and local economic data, Exeter is home to approximately 10,500 businesses, of which around 9,700 are small and medium-sized enterprises (SMEs). 

The city’s unemployment rate sits at 3.0 per cent, below the national average, but businesses are already feeling the pinch from rising costs, with inflation affecting wages, energy, and commercial rents. 

Commercial rents in Exeter’s Marsh Barton and city-centre areas have increased by an average of 5–7 per cent over the past 12 months, adding to operational costs for local companies.

Today, the Chancellor announced the Government’s financial plans. Reports in The Telegraph suggest the Budget includes a £15 billion package of welfare and benefit changes, alongside decisions on taxation and National Insurance that impact employers. 

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Economists say the scale of the plans could limit fiscal room elsewhere, increasing the likelihood that businesses face further tax or cost pressures depending on how the Budget is balanced.

For Exeter businesses, the uncertainty surrounding the Budget already affects planning. Several firms say it is the lack of clear information, rather than the measures themselves, that causes the most disruption.

Kate Williams, founder of Exeter-based KW Marketing, says brands across the South West are delaying growth decisions because they do not yet know what the financial landscape will look like: “If the Budget eases financial pressure on small businesses, it creates more confidence to invest in long-term growth, hiring and digital innovation.” 

“But if costs rise again, many brands pull back or delay decisions, which slows momentum for the whole ecosystem.”

Simon Beer, managing director of Bigwave Marketing, adds that the lack of clarity has created “a ripple effect through business decision-making,” with some clients delaying projects due to the economic climate. 

The hospitality sector in Exeter highlights additional pressures. A spokesperson from Arcadia Pub says: “The new Budget has landed hard on pubs in and out of Exeter — rising staffing costs, energy bills and business rates are squeezing margins that were already painfully thin.” 

Adding to this, they said: “With pubs now closing at roughly one a day across the UK, it feels like we’re watching a slow-motion collapse of an industry that once held communities together.” 

“Pubs have always been part of the backbone of British life, but unless something changes, it’s hard not to worry that many won’t survive the next decade. What we’re losing isn’t just businesses — it’s community, culture and connection.”

The Chancellor also announced an increase to both the National Living Wage and National Minimum Wage from April 2026. 

Young people on the National Minimum Wage are set to see an increase of up to £1,500 a year following an 8.1 per cent rise, while the National Living Wage will rise by 4.1 per cent, equivalent to up to £900 a year.

Steve Race, Labour MP for Exeter, says:“I know that hard-working people in Exeter are still struggling to make ends meet or feeling the pinch. While wages are growing at the fastest rate in over three years, there is more to do to tackle the cost of living. That’s why I’m delighted with the Chancellor’s announcement today that she is increasing both the National Living Wage and the National Minimum Wage.” 

“Putting more money into people’s pockets helps to tackle poverty, raise living standards, and put more money into local businesses.” 

“The increase in the National Living Wage will be particularly important for young people who are just starting out in their careers and saving for their future homes.”

Other sectors are facing similar pressures. EPIC Solutions, a paediatric clinical practice in Marsh Barton, says wage rises and higher employer National Insurance contributions increase costs during its planned expansion. 

The practice has raised some service charges from January 2026, noting that any income tax changes in the Budget could place additional pressure on families accessing care.

Exeter businesses across sectors say stability remains a key priority, with many waiting to see whether today’s Budget provides clearer conditions for planning.