UK Economic Sentiment Dips Following Tax-Heavy Budget

Consumer confidence and business optimism decline as tax increases raise concerns over economic growth and hiring prospects.

Consumer confidence dropped in November, with only 19% of households feeling optimistic about the next three months, down from 21% in October, according to the British Retail Consortium (BRC).
Businesses in the services sector reported the sharpest decline in sentiment in two years, driven by rising costs and a £25 billion increase in payroll taxes set to take effect in April.
Economists warn of potential economic contraction in late 2024, with some citing stagnation and weaker-than-expected growth following the £40 billion tax-raising budget.
Retailers face mounting cost pressures, including a £7 billion rise in expenses from higher employer National Insurance Contributions, which may lead to price hikes or reduced investments.
The Confederation of British Industry (CBI) reported falling hiring intentions and declining profitability, with business investment remaining low compared to international peers.