Proactive Investors - Business confidence hit a four-month low in October as the prospect of a string of tax increases in the upcoming Budget weighed on sentiment.
Lloyds Banking Group PLC (LSE:LON:LLOY)’s business barometer showed a three-point drop over the month to 44 on Monday.
This reflected falling confidence around the economy as a whole and firms’ own trading prospects, with the drop taking sentiment further from a nine-year high seen this summer.
Chancellor Rachel Reeves is expected to lift the likes of employer national insurance contributions in the Budget this Wednesday, under plans to raise billions to fund further government spending.
The drop in Lloyds’ reading comes after separate surveys from GfK and S&P Global previously also showed business sentiment had dropped ahead of the Budget.
Lloyds’ survey did show a net balance of 37% of firms intended to boost hiring over the next year, though the research was carried out before reports emerged of the national insurance tweaks.
“Although overall business confidence dipped in October, it follows a sustained period of significant optimism, and business sentiment remains above historical levels,” Lloyds economist Hann-Ju Ho said.