Autumn Statement fails to lift mood in the capital ahead of Christmas, survey suggests
Business confidence in London fell sharply approaching Christmas, as confidence in the wider economy took a big knock despite the measures announced in the Autumn Statement.
According Lloyds Business Barometer, business confidence in the capital fell 18 points in December, taking it down to 38 per cent.
The significant drop was mainly driven by growing concern about the wider economy, which dropped 25 points to 28 per cent.
The data, which surveys businesses around the country, was the first conducted since the Autumn Statement when the government announced a range of measures designed to boost the economy.
The most important of these measures was making permanent the full expensing of capital investment. This enables firms to offset the full cost of purchasing plant, machinery, technology and IT equipment against their annual profits – instead of spreading it across multiple years.
Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said “it’s possible that last month’s Autumn Statement didn’t deliver the boost to confidence that the City had hoped for”.
He also suggested that high prices might have “kept a lid” on Christmas retail spending.
Looking at the country more broadly, business confidence fell seven points to 35 per cent. This was the largest monthly decline since August last year.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, noted that the UK’s economic outlook was downgraded in the Autumn Statement, which “will undoubtedly have had an impact on business confidence as we head into 2024”.
Falling confidence in the economy comes shortly after figures showed that GDP contracted 0.3 per cent in October, reigniting fears that higher borrowing costs might tip the UK into a recession.
Despite the decline this month, confidence remains notably higher than a year ago, when business confidence was at just 17 per cent.