LONDON BUSINESSES WARN AUTUMN BUDGET WILL STIFLE GROWTH
London businesses fear that next week’s Autumn Budget could tighten the squeeze on investment and workforce growth, according to new figures from the London Chamber of Commerce and Industry (LCCI).
A survey of more than 360 business leaders across the capital shows near-unanimous concern that higher taxes and rising employment costs will further erode confidence at a time when companies are already struggling with slowing demand, skills shortages and weaker hiring activity.
The findings paint a stark picture of a business community bracing for tougher conditions. According to LCCI, 95% of London firms are worried about the impact of tax rises, with many expecting direct consequences for profitability and investment decisions. Six in ten firms anticipate lower profits, while half say they will be forced to scale back investment plans.
The pressure is already filtering into the labour market. Half of surveyed companies expect to freeze pay, pause bonuses or halt recruitment altogether if costs rise further, reflecting an increasingly cautious stance as unemployment edges higher. Employers also warn of deeper cuts: 60% say that further increases in the cost of employing staff would push them towards recruitment freezes or reductions, and more than a third admit redundancies would be considered.
The recruitment picture is equally strained. More than a third of firms report difficulty filling open roles, while another third are not recruiting at all — a sign that demand for talent is softening even as skills shortages persist.
Despite this, there is clear consensus among business leaders on what they want from the Chancellor: policies that reduce costs and spur investment. Seventy per cent of firms favour tax cuts, arguing that freeing up capital would help them hire and expand. Six in ten are calling for a reversal or reduction of the higher National Insurance Contributions introduced in April 2025. More than half want lower business rates and a broader reduction in employment-related costs.
But confidence in the Government’s willingness to listen is low. Two-thirds of firms say they have no confidence that the Chancellor, Rachel Reeves, will take business views into account, and 78% do not believe the Government will deliver economic growth in the near term. The feedback underscores a widening disconnect between Westminster and the capital’s commercial sector, which contributes disproportionately to UK growth, tax revenues and employment.
Karim Fatehi OBE, Chief Executive of the London Chamber of Commerce and Industry, said the results should serve as an urgent warning to the Treasury.
“This survey sends a clear and urgent message: businesses are already under immense pressure, and the anticipated measures of the upcoming Autumn Budget risk making a difficult situation far worse. Companies want to invest, hire and grow, but rising taxes and higher employment costs are pushing them in the opposite direction. The Chancellor must recognise the scale of concern across the business community and act decisively to restore confidence.”
He welcomed the Government’s recent reversal of proposed income tax rises — a measure that had caused “extreme concern” among 75% of London business leaders — but insisted that broader reform was needed.
“The Autumn Budget must back growth, not burden it. That means cutting unnecessary taxes, reducing business rates and reintroducing VAT-free shopping to keep London competitive on the global stage. Businesses also need a clear plan to tackle skills shortages, support young people into work, and ensure access to the talent London depends on.
“London firms are ready to invest and expand, but they need the conditions to do so. The Government must deliver a Budget that empowers businesses to trade, hire and compete internationally, because when London thrives, the UK thrives.”
The survey adds to growing pressure on the Treasury as the Chancellor prepares to announce the Autumn Budget, with business groups increasingly vocal about the need for pro-growth measures to revive confidence and competitiveness across the capital.
