Business Confidence Declines Following UK Budget

According to an Ulster Bank survey, business confidence in Northern Ireland declined subsequent to the UK budget introduced in October. The bank conducts a monthly survey of approximately 200 businesses, representing the four principal segments of the private sector. Business sentiment, as measured by the November survey, reached its lowest point in more than a year. Nevertheless, companies generally maintain optimism that their output will increase over the forthcoming year, a sentiment connected to an anticipated rise in new orders. Sebastian Burnside, who serves as chief economist for NatWest, the parent company of Ulster Bank, commented: “Last month we said that the November data would give us the first insight into the impact of the UK Budget on firms.” He further stated: “On an initial look the main effect has been to dampen business confidence.” The budget incorporated an increase in employers’ National Insurance (NI), which is a tax imposed on company payrolls. Commencing next April, all but the smallest firms will be required to pay NI at a rate of 15% on salaries exceeding £5,000. The current rate stands at 13.8% for salaries above £9,100. Early in December, the Northern Ireland Assembly was apprised that this change was anticipated to have a substantial effect on the childcare and hospitality sectors. The Ulster Bank survey additionally indicates that the Northern Ireland private sector continued to expand during November. Nevertheless, the rate of growth was the weakest observed since January. Non-retail services consistently represented the strongest performing segment of the local economy. Copyright 2024 BBC. All rights reserved. The BBC is not responsible for the content of external sites. Read about our approach to external linking.