UK business optimism hits post-pandemic low, says IoD

UK’s Institute of Directors (IoD) reported on Sunday that optimism among its members has plummeted to the lowest level since the onset of the COVID-19 pandemic, following tax increases in finance minister Rachel Reeves’ first budget on October 30.

Investment plans and employment intentions were the weakest since May 2020, with business leaders’ optimism dropping to -65 in November from -52 in October.

IoD Chief Economist Anna Leach stated that businesses are struggling to absorb the budget’s impact on their plans, leading to a significant decline in confidence.

She added that the budget has undermined the private sector’s ability to invest in their businesses and workforces.

The IoD report adds to growing complaints from businesses since the budget and other signs of an economic slowdown. Last week, Reeves assured the Confederation of British Industry that there would be no further borrowing or tax increases in future budgets.

Reeves announced £40 billion ($51 billion) in tax rises, including a £25 billion increase in employers’ annual social security contributions.

The IoD survey, conducted between November 15 and 27, was based on 601 responses, mostly from small businesses.

Attribution: Reuters

Subediting: M. S. Salama