Chancellor returns from China to face business blow

Major firms’ bosses less confident on economy, survey finds

- DAVID MADDOX

Rachel Reeves returns from China to London facing a new serious warning as Deloitte reported that business bosses' confidence is at one of its lowest points since the Covid-19 pandemic in 2020.

After suffering a barrage of criticism for going ahead with her controversial trip to China, the chancellor is being told that her management of the economy is under question by some of the country’s biggest companies.

To make matters worse, she may be forced to fire her City minister Tulip Siddiq over allegations of taking gifts from her aunt and deposed Bangladesh leader Sheikh Hasina when she was in power.

According to the survey of 63 chief finance officers (CFOs) at major companies, a net 26 per cent reported feeling more pessimistic about the prospects of their business than three months ago, marking the first time sentiment has tipped into negative territory since the second quarter of 2023.

The survey is the 70th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. Those surveyed include the CFOs of 29 FTSE 350 companies. The rest were CFOs of other UK-listed companies, large private companies and UK subsidiaries of major companies listed overseas.

While confidence is still above the lows of 2020 and Liz Truss’s mini-Budget in 2022, a net 58 per cent expect UK corporates to cut discretionary spending, and a net -64 per cent expect increases in hiring, which is a four-year low. The figures appear to underline a crisis in confidence in the Labour government to deliver on its number one mission of economic growth.