Eight in ten small businesses are worried about the upcoming Budget, according to Novuna Business Finance, with firms concerned that measures set out by the Chancellor could further hurt their business. The survey shows that 86% of small business owners fear the Budget could harm their growth prospects, with only 25% expecting growth in Q4 2025. This marks a decline from 35% last year and the fourth consecutive quarter of falling confidence. Jo Morris from Novuna noted that small business growth forecasts “are down this year,” highlighting the need for supportive measures in the Budget.

UK construction output fell by 0.3% in August, according to the Office for National Statistics (ONS). The decline was primarily driven by a drop in repair and maintenance activities. The latest PMI from S&P Global indicates that construction output has contracted for nine consecutive months. Steven Mulholland, chief executive of the Construction Plant Hire Association, noted that construction accounted for 15.2% of all insolvencies in July 2025, highlighting the industry’s struggles. Anna Leach, chief economist at the Institute of Directors, has expressed concern over these challenges, including skills shortages and rising costs.

The UK economy grew by 0.1% in August, data from the Office for National Statistics (ONS) shows, with this marking an improvement on the 0.1% contraction recorded in July. The data also shows a 0.3% increase over the three months to August. The services sector, which constitutes about 80% of the economy, expanded by 0.4% during three-month period, while construction was up 0.3%. However, production fell by 0.3% overall, raising concerns about industry challenges due to rising costs and weak demand. Yael Selfin, chief economist at KPMG UK, said that “uncertainty around the composition of any potential tax rises, alongside the timing of the Budget in late November, is expected to weigh on activity for both households and businesses.” She added: “As a result, we anticipate growth to remain sluggish over the coming months.”

The Chancellor, Rachel Reeves, faces a challenging fiscal landscape with only £9.9bn of headroom, one of the narrowest margins in 15 years. The Institute for Fiscal Studies (IFS) warns she may need to raise income tax by 4p in the pound or implement significant spending cuts to create a £50bn buffer, saying there is a “strong case” for Ms Reeves to substantially increase the £10bn headroom she has previously given herself against her own debt rules. IFS director Helen Miller suggested that Ms Reeves should consider measures to “rebuild fiscal credibility by boosting her safety margin now.”

The Institute for Fiscal Studies (IFS) has urged Chancellor Rachel Reeves to consider significant welfare cuts in the upcoming Budget to address a potential £22bn shortfall. The IFS has called for “bold” action, suggesting options like scrapping the pensions triple lock and limiting health-related benefits. The IFS says there is a strong case for the Chancellor to raise significantly more revenue, building up a heavier buffer. Helen Miller, the director of the IFS, said: “That wouldn’t be costless – but nor is limping from one forecast to the next under constant speculation that policy will be tightened again.” she added: “Persistent uncertainty is damaging to the economic outlook.”

BT Group’s chief finance officer, Simon Lowth, has warned that proposed increases in business rates on large properties could hinder investment in vital infrastructure. He said that the changes might lead to a disproportionate financial burden on infrastructure providers, potentially costing them £400m annually. Mr Lowth emphasised the need for reform in the business rates system, which he described as outdated and unfair. Research by BT suggests that the business rates changes could reduce business investment by £1.4bn over five years and permanently shrink the UK’s economy by £1.5bn a year.

Britain’s ambitions to become a critical minerals powerhouse have suffered a setback after Pensana scrapped plans for a £250m rare earths refinery near Hull. The facility, which was expected to create 126 jobs and receive government backing, would have processed materials for electric car and wind turbine magnets. Instead, the company will shift its refining operations to the US. Chairman Paul Atherley said the move followed the Trump administration’s decision to guarantee purchases from an American rare earths mine, a level of support not matched by European governments.

The Chancellor has been warned that increasing VAT in the Budget could harm the economy more than income tax hikes. Rachel Reeves has pledged not to raise VAT, but economists suggest she may have limited options. While a 1% VAT increase could generate £9.9bn annually by 2029/30, the National Institute of Economic and Social Research warns it would reduce real incomes by nearly 3% and GDP by 1%.

Anthropic CEO and co-founder Dario Amodei has warned that the rapid advancement of AI could disrupt the workforce “faster and more broadly than anything we’ve seen before.” While he remains optimistic about AI’s potential, Mr Amodei has voiced concerns about society’s ability to adapt to such fast change. He argues that automation will not eliminate humans but will “rebalance” jobs, with engineers focusing on harder tasks and supervising AI systems rather than doing routine work.