Business confidence among British firms has plummeted to levels not seen since the initial COVID-19 lockdown, according to a recent report from the Institute of Directors (IoD). The decline in optimism comes on the heels of tax increases introduced by Finance Minister Rachel Reeves in her first budget.

Investment initiatives and employment plans have also taken a hit, marking the weakest outlook since May 2020. IoD Chief Economist Anna Leach commented that business confidence continues to decline as firms assess the budget’s impact on their operations and workforce strategies.

Despite assurances from Reeves to limit future tax hikes and borrowing, the IoD survey underlines significant concerns among business leaders, with survey responses largely from small businesses between November 15 and 27.

(With inputs from agencies.)