Business confidence in the UK has dropped to its lowest level since January 2023, according to a report by BDO, a business advisory and accountancy firm. The firm’s Optimism Index fell 5.81 points to 93.49, marking the biggest month-on-month decline since August 2021.
Industry leaders blame Labour’s recent “pro-growth” budget for the downturn in confidence. The budget included tax hikes, including an increase to National Insurance Contributions and a rise in the National Living Wage. Businesses are worried that these measures will push up inflation and slow hiring.
The UK job market also saw a significant slowdown in November, with demand for staff falling at the fastest rate since August 2020, according to KPMG and the Recruitment and Employment Confederation. The downturn is attributed to businesses weighing the costs of increasing employee wages following the budget.
Bank of England Governor Andrew Bailey has acknowledged that employers warned of possible job cuts due to Labour’s budget, while retailers have estimated a £2.3 billion hit when the National Insurance increase comes into effect next April.
Source: https://www.cnbc.com/2024/12/09/uk-business-confidence-falls-to-lowest-level-in-almost-two-years.html