UK business sentiment falls ahead of budget

Sentiment among British manufacturing companies has declined at the fastest pace in two years, according to a survey by the Confederation of British Industry (CBI).

The CBI’s measure of business sentiment dropped to -24 per cent in the three months to October, down from -9 per cent in the previous quarter.

Factories reported easing cost pressures, with costs rising at their slowest pace in four years. Ben Jones, CBI’s lead economist, expects the downturn in sentiment to bottom out, noting that Finance Minister Rachel Reeves’ upcoming budget on October 30 could boost confidence.

“Manufacturers will be looking to the chancellor to deliver a confidence-boosting budget that supports business and greases the wheels of investment,” Jones said.

Despite concerns over potential tax increases, firms believe that clarity on future tax plans and measures to enhance productivity can support long-term growth.