UK firms' expectations for growth take 'decisive turn for worse', CBI says

Growth expectations among UK companies have taken "a decisive turn for the worse" in a fresh blow to Rachel Reeves amid warnings that business confidence has plummeted since the budget.

- Julia Kollewe

Growth expectations among UK companies have taken "a decisive turn for the worse", in a fresh blow to Rachel Reeves amid warnings that business confidence has plummeted since the budget.

For the first time this year expectations for growth have turned negative, according to the Confederation of British Industry's latest indicator, which shows a majority of companies expect activity to decline in the three months to February.

Business volumes in the services sector are expected to decline, including in consumer services, with more firms in the business and professional services sectors expecting a drop in activity in the next three months.

The gloomier outlook comes as private sector activity declined again in the three months to November, according to the CBI, with all three major sectors - services, manufacturing and wholesale and retail - reporting falling business volumes, sales or output.

Reeves's October budget contained £40bn of tax rises, including £25bn from increasing the national insurance contributions (NICs) paid by companies. The chancellor has said the decisions were necessary to stabilise the public finances and fund better public services.