- News
- UK
- UK Politics
Labour chancellor under pressure to do more to improve the prospects for economic growth
Kate DevlinWhitehall Editor Monday 01 December 2025 00:12 GMTComments
CloseDefiant Rachel Reeves says she will be Chancellor for years
Sign up for the View from Westminster email for expert analysis straight to your inbox
Get our free View from Westminster email
Get our free View from Westminster email
Email*SIGN UPI would like to be emailed about offers, events and updates from The Independent. Read our Privacy notice
Business confidence is at an almost record low after the Budget, the Institute of Directors has warned.
In the wake of Ms Reeves’ announcements, which included an above-inflation rise in the minimum wage from April, industry leaders were more likely believe their revenue would fall and companies would invest less, a survey by the IOD found.
Anna Leach, chief economist at the IOD said the deterioration in their expectations was “worrying” and called on Rachel Reeves to do more to improve the prospects for economic growth.
After the Budget, the owner of All Bar One, Mitchells & Butlers, warned it faced about £130m in extra costs over the next year because of higher wages and rising food prices.
The IoD Directors’ Economic Confidence Index, which measures business leader optimism in the UK economy, remained at a near record low of -73 in November, unchanged from October. And in a snap poll directly after the Budget, the index rose only one point to -72.
Ms Reeves is under pressure to do more to improve the prospects for economic growth. (BBC)Ms Leach said: “Headcount and investment expectations have fallen sharply, to levels close to those seen during the pandemic. Revenue expectations have also eased, though they are holding up better than other indicators. Crucially, confidence in leaders’ own organisations has dropped too — a sign that the Budget has weakened sentiment not just about the UK economy, but about firms’ ability to grow in it.”
The OBR has forecast that the UK’s growth will be just 1.5 per cent this year.
In documents published alongside the Budget, it also slashed predictions for next year and the three years after that.
The watchdog also warned the Budget contained no measures which would have a “material effect” on growth, but did raise £26bn in taxes.
In a speech on Monday Sir Keir will admit the government need to go "further and faster" on growth.
He will defend the Budget for tackling the cost of living, creating greater ‘headroom’ and protecting investment and public services.
While he will say "economic growth is beating the forecasts", he will add that ministers must go "further and faster" to encourage it.
He will also confirm reforms to the building of nuclear power plants, after the nuclear regulatory taskforce found that "pointless gold-plating, unnecessary red-tape and well-intentioned, but fundamentally misguided environmental regulation had made Britain the most expensive place to build nuclear power".
"We urgently need to correct this," the Labour leader will say.
Business secretary Peter Kyle will be tasked with applying the same deregulatory approach to major infrastructure schemes, in a bid to boost growth.
More about
BudgetRachel ReevesInstitute Of DirectorsJoin our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments
