Business ‘cannot bear the brunt’ of more tax hikes, the CBI has warned as it revealed prolonged gloom among firms under Labour has lasted longer than during the pandemic.
The Confederation of British Industry (CBI) said uncertainty about the forthcoming Budget was weighing on sentiment, leaving firms to delay decisions until they receive further clarity.
And it revealed that firms expect business activity to shrink over the next three months.
That reading for October meant sentiment has been negative for 13 months in a row – stretching back to last year’s Budget, when businesses were hammered by Chancellor Rachel Reeves’ £25 billion raid on employer National Insurance.
That suggests Labour’s policies have plunged businesses into an even longer period of gloom than during Covid.
Now, fears are even worse as the Chancellor looks to fill a hole in the public finances with still more tax increases.
CBI deputy economist Alpesh Paleja said: ‘Firms are facing a difficult winter, with private sector momentum weak and confidence fragile.
‘Uncertainty around the upcoming Budget is weighing heavily on sentiment, with many firms keeping key decisions on hold until more clarity is forthcoming.’
The CBI has warned business ‘cannot bear the brunt’ of more tax hikes (Pictured: Rachel Reeves holding the red box at the reveal of the Labour Government’s first budget in 2024
It came as separate figures from Helm, an organisation for growing ‘scale-up’ business founders, also revealed anxiety over the Budget, with 75 per cent putting hiring or investment decisions on hold until it is delivered.
Helm chief Andreas Adamides said: ‘These figures are a flashing red light on the UK’s economic dashboard.’
Marks & Spencer chief executive Stuart Machin last week urged Ms Reeves to ‘change course’ to escape an ‘economic doom loop of ever-higher taxes and lower growth’.
And Stuart Rose, a predecessor at M&S, warned that Labour has pushed Britain to ‘the edge of a crisis’.
