UK business sentiment weakest in two years before budget: CBI

SENTIMENT among British manufacturing companies fell at the fastest pace in two years ahead of finance minister Rachel Reeves’ first budget next week, a survey showed on Thursday (Ocr 24).

The Confederation of British Industry’s (CBI) measure of business sentiment dropped in the three months to October to -24 per cent from -9 per cent in the three months July.

Factories also reported easing cost pressures which rose at their slowest pace in four years.

Ben Jones, CBI’s lead economist, said he expected the downturn in sentiment in the manufacturing sector to bottom out and Reeves’ budget speech on Oct 30 was a chance to change the tone.

“Manufacturers will be looking to the chancellor to deliver a confidence-boosting budget that supports business and greases the wheels of investment,” Jones said.

“While possible tax rises remain a concern, firms believe that clarity over future tax plans, measures to enhance productivity, and the country’s net zero trajectory can all help cement the path to long-term growth.”

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Reeves, who has warned that she will increase some taxes, will set out her plan for spending and taxes.

The CBI’s monthly industrial orders balance fell to -27 in October from -35 in September, marginally above economists’ forecasts in a Reuters poll of -28.

A purchasing managers survey, published earlier on Thursday, also showed weakening sentiment among firms. REUTERS