"The weakness in private sector activity doesn't show any signs of letting up and is now expected to persist to the end of this year. The themes cited by businesses paint a, by now, familiar picture: demand conditions are lacklustre, with firms feeling the knock-on impact of cautious spending and investment behaviour across the economy. Wrapped into this, the rise in employer NICs and the National Living Wage continue to bite on bottom lines. And a persistent climate of global economic uncertainty is further hampering decision making."
"This is now accompanied by renewed nervousness around the November Budget, with businesses concerned about being asked to again shoulder the burden of fixing the public finances. The business tax burden is already at a 25-year high and the Chancellor must quickly reaffirm last year's commitment to no more business tax rises, avoiding Budget speculation further curtailing sentiment in the run up to 26 November. Doing so will boost confidence and accelerate the significant contribution businesses want to be making to the shared growth mission."
Firms across the private sector expect activity to fall in the next three months (weighted balance -20%), extending negative predictions that began in late 2024. The downturn is broad-based: services volumes are set to decline (-18%) driven by business & professional services (-14%) and consumer services (-31%); distribution sales are expected to fall significantly (-33%); and manufacturing output is forecast to contract (-14%). Private sector activity already fell in the three months to September (-32%), with all sub-sectors reporting declines. Business pressures include lacklustre demand, cautious spending and investment, higher employer NICs and National Living Wage costs, global uncertainty, and concern about further business tax rises around the November Budget.
Read at London Business News | Londonlovesbusiness.com
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