What are your expectations for growth in the next three months?

An economy can only grow if businesses grow and Rachel has created an environment where this is harder than ever. Businesses will reign in investment as their costs increase just to stand still. Even Santa is seeking tax advice because she will probably go after him next.

Britain stands at an economic crossroads, with traditional growth engines sputtering and new challenges emerging on the horizon. The CBI’s warning of decisively worsening growth expectations highlights the precarious position of the UK economy as it enters the new year. This gloomy outlook, the weakest in years, comes as firms grapple with the aftermath of a challenging autumn and recent budget announcements, with consumer services bearing the brunt of the downturn. The services sector, long considered the backbone of the UK economy, is likely to continue facing particularly strong headwinds in the first half of 2025. Consequently, hiring intentions are at their lowest level since the pandemic, leading to the labour market’s previously bright outlook dimming significantly. All eyes are now on Whitehall for decisive action to reignite economic momentum, however after a less than inspiring first few months, expectations are at an all time low.

Forget the festive season; it’s ‘Bleak House’ for the UK economy.

The CBI Growth Indicator has turned negative, signaling expected declines in activity over the next three months, a direct reaction to Rachel Reeves’s tax increases.

Business confidence has plummeted to its lowest since the first Covid lockdown, with many firms forced to cut pay rises, lay off staff, and raise prices due to the £25 billion National Insurance hike. Private sector firms anticipate a 33% drop in consumer services, marking the weakest expectations in two years.

This grim outlook presents a significant challenge for Sir Keir Starmer’s government as it faces mounting criticism and dwindling support from the business community.