Just one in four business leaders has confidence in the Government to deliver economic growth, according to a poll by the London Chamber of Commerce and Industry (LCCI). While 81% said they were not confident that ministers will address concerns from businesses, 77% declared a lack of confidence in the Government delivering on a commitment to grow the economy. The poll also shows that 78% of respondents said increased National Insurance contributions will have a negative impact on their firm. Around 4 in 10 (38%) said changes in the Employment Rights Bill will mean a hiring freeze, while 16% fear it will lead to redundancies. LCCI chief executive Karim Fatehi said: “This snap survey has confirmed our worst fears; the business community views the combined package of increased employer NICs, cuts to business rates relief and the employment rights bill as a serious threat to their operations.”

Europe’s manufacturing sector is grappling with a significant decline in demand, with “no sign of a recovery” in sight, according to Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. The S&P Global purchasing managers’ index (PMI) for the eurozone fell to 45.2 in November, with a reading below 50 indicating contraction, with France, Germany, and Austria particularly affected. The UK also faced challenges, with its PMI dropping to a nine-month low of 48, as factory owners cut jobs and investment. The situation has been exacerbated by Brexit-related border checks and rising costs from measures set out in the Budget. Rob Dobson from S&P Global noted that geopolitical tensions and supply chain disruptions have created an environment of “high costs, low demand and raised uncertainty” for manufacturers. The outlook remains bleak, with analysts warning of continued difficulties ahead.

Labour is facing questions over its plan to deliver economic growth after Building Safety Minister Alex Norris refused to commit to the election pledge. As part of its manifesto, Labour announced five key missions, including a pledge to kickstart economic growth. However, in an interview with Times Radio, Mr Norris refused to comment on speculation that Sir Keir Starmer plans to sideline a pledge to become the fastest growing economy in the G7. He insisted, however, that Labour “made clear principles at the election about what we want to see in this country” and is “going to work to deliver them.” A Downing Street spokesperson later insisted that growth is the Government’s “number one priority.”

Marcus Stuttard, the head of London’s AIM market, has urged ministers to rule out further tax increases after October’s Budget halved inheritance tax relief on shares in the junior market from 100% to 50%. Mr Stuttard said: “The market is looking for some certainty from government that there will be no further changes to business relief.” Analysts from Peel Hunt have warned that the tax cuts could cost the Treasury more than £2bn due to reduced capital gains tax from falling share values. AIM companies contribute significantly to the UK economy, contributing £35.7bn to UK GDP and supporting more than 410,000 jobs, according to Grant Thornton. It is noted that while AIM is down by nearly 10% over the past six months, the FTSE 100 is roughly flat over the same period. Meanwhile, the Lord Mayor of London, Alastair King, has called for the abolition of stamp duty on UK shares to deliver a “shot in the arm for homegrown companies.”

Labour’s proposed changes to inheritance tax are set to have a devastating impact on family-run businesses and farms, with an estimated 125,678 job losses over the next five years. According to CBI Economics, the introduction of death duties on family-owned firms could reduce economic activity by £9.4bn, resulting in a £1.3bn loss for the Treasury by 2030. A survey revealed that one in five family firms plans to take action to mitigate the new 20% tax on assets exceeding £1m, with 15% considering selling their businesses entirely. Neil Davy, chief executive of Family Business UK, said: “Changes to Business Property Relief announced in the Budget will fundamentally remove incentives among owners of family firms to invest in their businesses, and in many cases threaten their viability.” Warning that the CBI Economics research suggests that there will be a negative impact on jobs, investment, and tax receipts into the Treasury, Mr Davy added: “Downsizing of businesses, asset disposures, complete sale or liquidation are very real unintended consequences of this policy.”

The UK economy has reportedly lost billions in investment over the last five years due to excessive regulation of the crowdfunding sector, according to the UK Crowdfunding Association. In a letter to City Minister Tulip Siddiq, Bruce Davis, chairman of the association, said: “The UK is now seen as having one of the most highly regulated markets for this type of investment in the world.” The association argues that the stringent regulations have increased marketing costs and deterred both investors and companies from raising funds, with many considering moving to EU jurisdictions. It has also suggested that the Financial Conduct Authority has failed to meet its Consumer Investments Strategy target, which aimed for a 20% reduction in high-risk consumers by 2025. The regulator has acknowledged the need for a greater risk appetite but emphasised the inherent risks involved in investing.

There are concerns that the recent increase in National Insurance for employers has contributed to a significant decline in part-time job vacancies for the festive season. According to Adzuna, the number of Christmas roles advertised has dropped by over 30%, from 31,843 in November 2021 to just 21,576 this year. Simon Thomas, managing director of Ridgefield Consulting, said businesses “are finding it increasingly difficult to justify the hiring of temporary staff during peak periods,” adding: “Consequently, many are choosing to reduce the number of new hires or cut back on the working hours of temporary employees.”

Analysis of the Government’s shared parental leave scheme suggests that uptake is less likely among lower earners, with campaign group The Dad Shift saying the initiative is “failing working families.” Shared parental leave is a state-funded scheme that allows parents to share up to 50 weeks of leave and up to 37 weeks of pay after the birth or adoption of a child. Analysis of HMRC data by The Dad Shift shows that the top 20% of earners make up 60% of those to use shared parental leave, while just 5% of those who took up shared parental leave came from the bottom 50% of earners. A review conducted in 2023 shows that 45% of fathers were unaware that shared parental leave was an option, with it also shown that it was used in fewer than 2% of all births last year.

Philip Lane, the European Central Bank’s (ECB) chief economist, says the bank should make monetary policy decisions based on upcoming risk, rather than the latest economic data. He said: “I think monetary policy needs to be essentially forward-looking, and to be scanning the horizon for what are the new shocks that might lead to less or more inflation pressure.” Looking ahead, Mr Lane said that at “some point”, officials will transition from being driven by the “very important disinflation challenge” to focus on keeping inflation at the ECB’s 2% target “on a sustainable basis.”