UK businesses are increasingly worried about the economic outlook, as a recent survey by the British Chambers of Commerce (BCC) reveals that 48% of 5,152 companies surveyed between August 19 and September 16 cited taxation as their main concern ahead of the upcoming autumn budget. This marks a significant rise from 36% in the previous survey, reflecting heightened anxiety over the Labour government's fiscal policies and the ongoing conflict in the Middle East.
Finance Minister Rachel Reeves is set to present her inaugural tax-and-spending statement on October 30, with indications that some taxes may rise. The BCC's head of research, David Bharier, noted that the escalation in the Middle East conflict is also contributing to the negative sentiment among businesses.
In August, British government debt reached 100% of economic output, a level not seen since the early 1960s. Despite a slight decline in concerns over interest rates and inflation, many small and medium-sized enterprises remain hesitant to invest, with only 21% reporting increased investment.
The BCC survey indicates that only 56% of businesses expect turnover to rise in the next year, down from 58% in the previous quarter, highlighting a cautious outlook for economic growth.
As the Bank of England prepares to potentially reduce borrowing costs in November, the focus remains on how the government will navigate its fiscal policies amidst these challenges.