A streak of negative business sentiment has now lasted 10 months, a leading industry body has suggested, in further evidence that employers have struggled to turn a page on Chancellor Rachel Reeves’ £40bn tax raid at last year’s Autumn Budget. 

Prime Minister Sir Keir Starmer has repeatedly told MPs that business confidence was edging higher, pointing to an optimistic survey conducted by Lloyds Bank every month. 

But the Confederation of Business Industry (CBI)’s own monthly survey of some 900 firms suggests owners have planned for a drop in business activity in each of the last 10 months. 

The last positive reading for firms’ expectations on output volumes for the coming three months was in August. 

The month after showed a neutral reading suggesting just as many firms believed output would decrease as those who said it would increase. 

Researchers said that all parts of the private sector expected activity to decline, with respondents claiming that tax increases, delays in public procurement and tariff threats had left them uneasy about their future prospects. 

Firms still battling headwinds after Rachel Reeves’ first Autumn Budget

The CBI’s latest survey has also suggested that private sector output had dropped at a faster pace over the last three months compared to the previous two surveys. 

“The persistently negative outlook underlines the fragility of demand conditions,” said Alpesh Paleja, CBI deputy chief economist.