A survey has showed business confidence has plummeted to a four-month low in October amid concerns over this week’s Budget.
The latest Lloyds Bank business barometer showed that confidence slipped by three points to 44 per cent in October.
Sentiment had dropped lower amid greater pessimism among companies about the health of the UK economy.
Chancellor Rachel Reeves is expected to announce about £40billion of fiscal tightening on Wednesday, mainly via increases to employers’ national insurance contributions (NICs), capital gains tax and an extension of the freeze on on income tax thresholds.
Senior economist at Lloyds Commercial Banking Hann-Ju Ho said: “Although overall business confidence dipped in October, it follows a sustained period of significant optimism, and business sentiment remains above historical levels.
“Encouragingly, many businesses remain confident in their own trading prospects, and the increase in hiring intentions suggests more employers want to grow their workforce.”
Writing in The Mirror, Prime Minister Sir Keir Starmer said of this week’s budget: “This is the moment that will reject austerity, chaos and decline and choose a clear path of stability, investment and reform.
“It’s no secret that for 14 years, the Tories didn’t just run a leaky ship, they sailed it carelessly into every storm, smashing it against the rocks, and leaving the British people to pay the price.”
He added the Budget will “invest in growth, jobs and the NHS and rejects Tory chaos, division and decline.”
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European ambassadors urge Reeves to scrap VAT on international schools
European ambassadors have warned that imposing VAT on international schools in the UK could lead to hundreds of pupils leaving. German ambassador Miguel Berger and French ambassador Helene Duchene told The Times they wanted international schools excluded from plans to impose 20 per cent VAT on private schools.
From January, the Government plans to remove the VAT exemption and business rates relief for private schools to enable funding for 6,500 new teachers in state schools. Currently, independent schools do not have to charge 20 per cent VAT on their fees because there is an exemption for the supply of education.
Berger said Deutsche Schule London, based in Richmond, had around 900 pupils and “between 20 and 25 per cent might be obliged to leave the school” if the change was introduced.
He said: “The German state covers 30 per cent of the costs of the school and 50 per cent of the investment, so there is a lot of state funding that goes into the school. For expats coming here for two, three or four years wanting their children to go back to the national system, their only option is to go to these schools.
“We would really like to see the British government recognise the importance of these schools — not only for our political and cultural relations but also for the people this will affect.”
Jeremy Hunt accuses OBR of political bias
Former Chancellor Jeremy Hunt
PA
Jeremy Hunt has accused the government’s official budget watchdog of “political bias” ahead of this week’s budget.
It comes after the Office for Budget Responsibility (OBR) agreed to publish a review that is likely to be critical of the former Conservative government.
He said the failure to consult him before its publication amounted to an inappropriate “political intervention…I do not believe publishing a review with criticisms of the main opposition party on the day of a budget is consistent with political impartiality.”