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2h ago

UK Business Confidence Falls to Record Low as Firms Brace for Tax Rises

Executives point to expected business tax increases at the November Budget as the main drag on sentiment.

Skyscrapers of the Canary Wharf commercial district are seen with The Shard building and construction cranes reflected in a perimeter glass wall of the viewing area of Garden at 120, in the City of London financial district, in London, Britain, September 23, 2025. REUTERS/Toby Melville
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Rachel Reeves visits some of the stands at the Labour Party conference in Liverpool
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Overview

  • The Institute of Directors’ September index dropped to -74 from -61, the weakest reading since the series began in 2016.
  • Survey respondents overwhelmingly blamed the expected tax rises in the 26 November Budget, with reports suggesting up to £30bn could be targeted.
  • Cost expectations hit a series high, led by rising employment costs that the IoD says are still affected by April’s increases in employer taxes and the living wage.
  • Hiring and investment plans deteriorated sharply, with headcount expectations at -13 and investment intentions at -20.
  • Corroborating signals included a large fall in Lloyds Bank’s Business Barometer, alongside official data showing just 0.3% GDP growth in Q2 and unemployment at 4.7%.