Britain’s Institute of Directors said business confidence had fallen to its lowest in more than nine years in a survey published on Wednesday that pointed to job cuts and lower investment.
The bleak outlook – based on 588 responses, mostly from small or very small businesses – stands at odds with official data and some other private-sector surveys that still show moderate economic growth.
The IoD said its economic confidence index sank to -74 in September from -61 in August, its lowest since the survey began in July 2016, just after Britain voted to leave the European Union.
“Persistent fears that taxes on business and assets will rise are stifling confidence, holding back investment, and threatening growth and living standards,” IoD Chief Economist Anna Leach said.
Finance minister Rachel Reeves is widely expected to need to raise tens of billions of pounds in extra taxation in her annual budget next month, and many businesses fear they again will be the main target as the government has ruled out raising most major taxes paid by individuals.
A separate survey by Lloyds Bank released on Tuesday also showed a big fall in September, although it remained similar to its average in 2024 and above typical levels the year before.
The IoD said businesses’ cost expectations had reached the highest since it started surveying about this in November 2017, while intentions for investment and hiring sank deeper into negative territory.
“The effects of the April rises in employment taxes and the living wage, alongside future concerns over employment regulations, continue to reverberate across companies,” Leach said.
Official data has shown seven consecutive monthly falls in the number of employees and the unemployment rate has risen to its highest since 2021 at 4.7%.
(Reporting by David Milliken; editing by Suban Abdulla)
