Business confidence edges up despite tax raid fears
Business confidence has grown for the fourth consecutive month, according to a fresh survey, despite rising speculation of a fresh tax raid on businesses by the Labour government.
Lloyds Bank’s business confidence index edged up two points to 54 per cent in August as sentiment among manufacturers climbed to its highest in a decade.
The spike in optimism came as firms anticipated higher revenue and profits in the next 12 months, with Lloyds’ trading prospect index reaching an 11-year high.
But whilst the Labour government may breathe a sigh of relief from the new findings, it comes as business confidence research remains scattered, with Lloyds often the outlier.
Prime Minister Keir Starmer declared confidence was at a nine-year high in the House of Commons in mid-July, which was correct as per previous research by Lloyds Bank.
However, the findings were countered by similar reports from the Institute of Directors (IoD), the Confederation of British Industry (CBI), the British Chambers of Commerce (BCC), and the Institute of Chartered Accountants in England and Wales (ICAEW), all of which stated that confidence was in negative territory.
Businesses hit back against tax speculation
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “This continued upward trend in business confidence suggests UK firms remain optimistic about their own trading prospects while there is a modest cooling of confidence in the wider UK economy. Firms are focusing on what they can control, with many looking to pursue growth opportunities, including entering new markets and adopting new technologies.”
Businesses across the UK have their eyes fixed on the Autumn Budget, when Chancellor Rachel Reeves is widely expected to
Just this week, Asda chair Allan Leighton warned Labour against further taxation that risks stagnating the economy.
Leighton said that the company has a “simple philosophy… if you want growth, you have to invest.”
“Growth isn’t driven by government. Growth is driven by organisations and companies and people. And if they can’t invest, then we will not grow, no matter what the government says or does,” he added.
It follows the bosses of Britain’s ‘Big Four’ banking giants – Lloyds, Barclays, Natwest and HSBC – all echoing concerns that a fresh levy on the sector would harm growth.