UK Employers Braced for Pre-Budget Nerves, Lloyds Says

The UK's business confidence has taken a dip ahead of the first budget plan from the new government, as indicated by a survey conducted by Lloyds Bank. The business barometer, which represents the difference between the percentage of firms with positive and negative views, fell by 3 percentage points to +44% in October. This decline echoes other signs of corporate nervousness about potential tax increases.

The survey, based on responses from 1,200 British companies with annual sales of over £250,000, was carried out between October 1 and 15. It revealed that while firms were more optimistic about their own prospects than those for the broader economy, the overall index remained above its long-term average. However, the survey also showed a decrease in hiring intentions, suggesting that more employers are hesitant to expand their workforce.

The new Chancellor, Rachel Reeves, is set to announce the budget on Wednesday, which is likely to include an array of revenue-raising changes, including potentially higher social security payments by businesses. The budget announcement is expected to have a significant impact on employers' hiring decisions and overall business confidence.

The UK's skills shortage and labour market tightness have been persistent issues, with an ageing population and structural tightness in some sectors contributing to the problem. The budget announcement is expected to address these challenges and provide measures to alleviate the pressure on the labour market. However, the specific measures and their impact on hiring remain to be seen.

In conclusion, UK employers are displaying further signs of pre-budget nerves, as indicated by the decline in business confidence. The upcoming budget announcement is expected to have a significant impact on hiring decisions and overall business confidence. The government is likely to address the UK's skills shortage and labour market tightness, but the specific measures and their effects on hiring remain uncertain.