LONDON, Nov 28 Reuters Business sentiment in Britain39;s services sector is falling at the fastest rate in two years, partly as a result of tax rises in finance minister Rachel Reeves39; first budget on Oct. 30, the Confederation of British Industry said on Thursday.
The downturn was sharpest in consumer services where large employers will bear the brunt of a 25 billion pound 32 billion rise in payroll taxes but the mood at business and professional services companies soured too, the CBI said.
On Monday Reeves told the CBI39;s annual conference that she would not raise taxes in the same way again, after the CBI39;s chief executive said businesses had been caught off guard by the scale of the tax rises.
Thursday39;s survey showed that optimism among consumer services businesses sank to its lowest since August 2022 at 55 in November, down from 19 in August, while among business and professional services sentiment fell to 29 from 9.
The index represents the difference between the percentages of businesses which say they are more optimistic and those who are more pessimistic.
Falling sentiment, weaker hiring intentions and firming cost pressures are all at least a partial response to the forthcoming rise in employer National Insurance Contributions, CBI Deputy Chief Economist Alpesh Paleja said.
Business and professional services firms said their profitability had fallen by the most since August 2020 and all types of services firm said they would invest less….