The UK’s private sector spent much of the autumn effectively “in limbo”, delaying investment and hiring decisions amid weeks of swirling Budget speculation that business leaders say left them bruised and uncertain about the government’s intentions.
The latest monthly survey from the Confederation of British Industry (CBI) reveals that firms sharply downgraded expectations for activity in the months ahead. The composite measure for anticipated private-sector activity fell to –27 in November, down from –20 in each of the previous two months, pointing to a widespread pullback in decision-making as rumours of tax rises intensified.
That cautious mood followed a significant drop in output, with the CBI reporting that private-sector activity fell at its fastest pace since August 2020. Every major sub-sector registered a decline, suggesting the impact of pre-Budget nerves was broad and deep.
CBI deputy chief economist Alpesh Paleja said the deterioration in confidence was closely linked to weeks of speculation about the Chancellor’s plans. “Growth expectations weakened in November, some of which may be down to jitters ahead of last week’s Budget,” he said. “Businesses tell us that much of the month passed in limbo, with big discretionary spending and investment on hold.”
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