British businesses delay growth plans amid Autumn Budget fears

UK businesses freeze investments ahead of Autumn Budget uncertainty

British businesses are growing more cautious as economic uncertainty rises ahead of the Autumn Budget. With growth slowing and tax concerns mounting, many firms are delaying investments or looking abroad for cheaper operations. Countries like Vietnam, Thailand, and Malaysia are now drawing interest as alternatives to China for manufacturing and supply chains.

The UK’s economic growth hit a low of 0.1 per cent between July and September, marking the weakest quarter since late 2023. Former Bank of England economist Andy Haldane linked this slowdown partly to speculation over Rachel Reeves’ upcoming tax changes. Businesses and consumers alike have pulled back on spending, wary of potential hikes.

A Barclays survey revealed that 55 per cent of British firms have put investment decisions on hold until after the Autumn Budget. Many are also struggling with rising costs, including higher employer national insurance and wage bills introduced last year. These pressures have pushed 47 per cent of businesses to consider expanding overseas—up from 33 per cent earlier this year and just 21 per cent in autumn 2023.

South-east Asia is emerging as a favoured destination, offering lower labour and manufacturing costs compared to China. A Santander survey found that 54 per cent of businesses have already moved or are planning to move their supply chains away from China. The shift reflects broader concerns about affordability and economic stability in the UK.

The combination of tax uncertainty, weak growth, and rising costs is driving British firms to reassess their strategies. More are now exploring international expansion, particularly in south-east Asia, to cut expenses and secure supply chains. The Autumn Budget will likely play a key role in shaping their next moves.