Major indicators to show the biggest declines included business investment and employment.
Others to fall back were expectations for revenue, exports and wages.
Recent data has shown the UK economy to have the fastest economic growth in the G7 over the first half of the year.
More on Uk Economy
Related Topics:
Prime minister Sir Keir Starmer and his chancellor Rachel Reeves have made securing growth the “top priority” but complain their plans are being complicated by a legacy £22bn black hole in the public finances.
“Tough choices” they have already announced, ahead of the 30 October budget, have included cutting winter fuel payments for all pensioners.
Advertisement
Please use Chrome browser for a more accessible video player
3:02
Chancellor quizzed over tax rises
Critics argue the tough choices include caving in to union demands to avert strikes, racking up a £9bn bill across public sector pay awards.
Commentators widely expect hikes to wealth taxes, such as capital gains tax, in the budget as it would chime with Sir Keir’s warning last month that those with the broadest shoulders would face the greatest burden.
An Employment Rights Bill is also due to prohibit zero-hour contracts and ban so-called fire and rehire tactics.
One particular sector to raise fears of an own goal was energy.
Industry body Offshore Energies UK claimed government plans to increase a windfall tax on North Sea oil and gas producers would lead to a £12bn fall in revenue to the state, due to weaker production and investment.
The IoD survey findings represent a major turnaround in opinion.
Ms Reeves secured a strong relationship with business in the run up to the election as firms ran out of patience with the Conservatives, long complaining of a lack of communication and strategy.
IoD chief economist Anna Leach said of its findings: “It’s disappointing to see last month’s welcome uptick in business leader confidence snuffed out over the summer.
Please use Chrome browser for a more accessible video player
4:12
Reeves’ black hole claim ‘not credible’
“It is notable that the sharpest drops in our economic measures are in investment and headcount expectations, whilst other measures have moved to a lesser degree, albeit in a likewise negative direction.
“The newsflow in recent weeks on employment rights and autumn tax rises has dented confidence in the environment for business in the UK.
“As we head into a busy autumn, we are calling on the government to take time to get policy design right for the long-term and deliver the stable tax and policy framework needed to drive business confidence and investment.
“Further clarity on the industrial strategy and the business tax roadmap, in conjunction with more progress in engaging with business on workers’ rights, would be welcome.”
The findings chime with warnings that the budget should not seek to rake in cash at the expense of the economy.
Former president of the CBI, the Cobra beer founder Lord Bilimoria, said fears of tax increases would spark an exodus.
He called on the government to concentrate on growth, calling any rise in capital gains tax “a short-sighted move”.
“Investors are not going to come here if you keep putting up taxes,” he told the Daily Mail.
“It will not bring in more money; in fact, money will fly from this country.”
His comments were echoed by lastminute.com co-founder Brent Hoberman, who told the newspaper it “does not make sense to scare off business investment”.
Watch Business Live with Ian King at 11.30am and 4.30pm on Sky News.
Dr Lade Smith, president of the RCP, said: “The RCP has reached the conclusion that we are not confident in the Terminally Ill Adults Bill in its current form, and we therefore cannot support the Bill as it stands.”
The move is significant because, under the bill’s current stipulations, a panel including a psychiatrist would oversee assisted dying cases.
The RCP outlined a number of issues it had with the current bill, including: the bill not making provision for unmet needs, whether assisted suicide is classed as a treatment or not, what the psychiatrists’ specific role on the panel would be, and the increased demand the bill puts on psychiatrists.
If the college support remains withdrawn, and the bill passes, it isn’t clear what effects it may have.
More on Assisted Dying
Related Topics:
Kim Leadbeater, the MP behind the bill, has confirmed it will include a clause that means anyone who does not want to be involved in the process will not have to do so.
Supporters of the bill argue it would ease the suffering of dying people, while opponents argue it would fail to safeguard some of the most vulnerable people in society.
Image: MP Kim Leadbeater talking to Sky News
Questions over the bill
The more prominent role of a psychiatrist in the bill came about after a previous amendment.
Initially, the bill said that after two independent doctors approved an assisted dying case, it would then need to be further approved by a High Court judge.
Instead, Ms Leadbeater proposed a voluntary assisted dying commissioner that included an expert panel with a psychiatrist.
She said this was a “strength, not a weakness,” but opponents of the bill disagreed, saying removing the High Court judge “fundamentally weakens protections for the vulnerable”.
Friday’s debate was already delayed from 25 April, to give MPs more time to consider amendments.
If the bill passes on Friday, it will move to the House of Lords, where it will undergo similar legislative stages, and if it passes that too, it won’t come into effect until at least 2029, after its implementation was delayed.
AI civil servants and sending human workers out of London are at the heart of the government’s plans to cut costs and reduce the size of the state bureaucracy.
Shrinking the civil service has been a target of both the current Labour and recent Conservative governments – especially following the growth in the organisation during the pandemic.
From a low in 2016 of 384,000 full time workers, in 2024 there were 513,000 civil servants.
The Department for Science, Innovation and Technology is claiming a new swathe of tools to help sift information submitted to public consultations could save “75,000 days of manual analysis every year” – roughly the work of 333 civil servants.
However, the time saved is expected to free up existing civil servants to do other work.
The suite of AI tools are known as “Humphrey”, after Humphrey Appleby, the fictional civil servant in the TV comedy Yes, Prime Minister.
The government has previously said the introduction of AI would help reduce the civil service headcount – with hopes it could save as much as £45bn.
Speaking today, Technology Secretary Peter Kyle appeared to take aim at expensive outsourcing contracts, saying: “No one should be wasting time on something AI can do quicker and better, let alone wasting millions of taxpayer pounds on outsourcing such work to contractors.”
Please use Chrome browser for a more accessible video player
1:47
March: 10,000 officials could go
Move outside of London
Other money-saving plans announced today include moving 12,000 civil servants out of London and into regional hubs – with the government hoping it can save almost £100m by 2032 by not having to pay for expensive leases of prime office space in the capital.
Currently, 95,000 full time civil servants work in London.
Tens of millions of pounds a year are expected to be saved by the closure of 102 Petty France, which overlooks St James’s Park, and 39 Victoria Street, which is near the previous location of New Scotland Yard.
In total, 11 London offices are slated for closure, with workers being relocated to the likes of Aberdeen, Belfast, Darlington, Bristol, Manchester and Cardiff.
The reforms of the civil service are being led by Chancellor of the Duchy of Lancaster Pat McFadden – one of Sir Keir Starmer’s most influential ministers.
Mr McFadden said: “To deliver our plan for change, we are taking more decision-making out of Whitehall and moving it closer to communities all across the UK.
“By relocating thousands of civil service roles we will not only save taxpayers money, we will make this government one that better reflects the country it serves. We will also be making sure that government jobs support economic growth throughout the country.
“As we radically reform the state, we are going to make it much easier for talented people everywhere to join the civil service and help us rebuild Britain.”
The government says it wants senior civil servants out of the capital too – with the aim being that half of UK-based senior officials work in regional offices by the end of the decade.
The government claims the relocations and growth of regional hubs could add as much as £729m to local economies by 2030.
Image: Pat McFadden is leading the changes to the Civil Service. Pic: PA
Union welcome – cautiously
Unions appear to cautiously welcome the changes being proposed.
All of Prospect, the PCS and the FDA say it is positive to see better opportunities outside of the capital.
However, they have asked for clarity around whether roles may be lost and what will be offered to people transferring.
Spreaker
This content is provided by Spreaker, which may be using cookies and other technologies.
To show you this content, we need your permission to use cookies.
You can use the buttons below to amend your preferences to enable Spreaker cookies or to allow those cookies just once.
You can change your settings at any time via the Privacy Options.
Unfortunately we have been unable to verify if you have consented to Spreaker cookies.
To view this content you can use the button below to allow Spreaker cookies for this session only.
Fran Heathcote, the general secretary of the PCS union, said: “If these government proposals are to be successful however, it’s important they do the right thing by workers currently based in London.
“That must include guarantees of no compulsory redundancies, no compulsory relocations and access to more flexible working arrangements to enable them to continue their careers should they wish to do so.”
Two US senators are calling on Treasury Secretary Scott Bessent to “exercise [the department’s] authority” and change a provision affecting taxes on corporate holdings of digital assets.
In a May 12 letter, Senators Cynthia Lummis and Bernie Moreno suggested Bessent had the authority to change the definition of “adjusted financial statement income” under existing US law in a way that could reduce what digital asset companies pay in taxes. The proposed adjustment was suggested as a way to modify a provision of the Inflation Reduction Act, signed into law in 2022.
“Our edge in digital finance is at risk if US companies are taxed more than foreign competitors,” said Lummis in a May 13 X post.
May 12 letter to Treasury Secretary Scott Bessent. Source: Cynthia Lummis
According to the two senators, the proposed modification would provide “relief to corporations that invest in digital assets.” Lummis has been one of the most outspoken digital asset advocates in Congress, while Moreno took office in January after crypto-backed political action committees spent roughly $40 million to support his 2024 Senate race.
The Inflation Reduction Act, which went into effect in 2023, imposes a 15% minimum tax on companies that report more than $1 billion in profits for three consecutive years. The measure would seemingly include unrealized crypto gains and losses, leading to Lummis’ and Moreno’s calls for the Treasury Department to “act swiftly.”
Senate awaiting second vote on stablecoin bill
The call from the two senators came as lawmakers in the Senate are expected to consider another vote on the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act — legislation to regulate payment stablecoins in the US. A motion for consideration failed to move forward in the Senate on May 8 due to Democratic lawmakers pushing back on Donald Trump’s ties to the crypto industry.
Lummis, one of the bill’s co-sponsors, suggested that she would continue to support digital asset regulation. The Senate could take up another vote in a matter of days.