The Government is being urged to deliver a “feel-good” Autumn Statement as businesses lose confidence in the prospects for Britain’s economy.
Chancellor Philip Hammond must take “bold steps”, including increasing tax breaks, cutting corporation tax and delaying the “poorly designed” Apprenticeship Levy, according to lobby group the Institute of Directors (IoD).
A survey of more than 1,000 business leaders carried out by the IoD shows that firms are worried about the economy but more optimistic about their own outlook.
IoD chief Simon Walker said: “Even though they think their organisations are still fundamentally sound, business leaders are worried about what the next few months hold for the UK economy.
“It shows the fragile nature of confidence that despite our members expecting profits to increase, overall business investment looks set to stagnate - if nothing changes.”
Mr Walker added that the UK economy “badly needs” an injection of confidence to prevent firms from scaling back hiring and investment plans.
“We need the Government to produce a bumper, feel-good Autumn Statement
“Increasing tax breaks for investment and cutting corporation tax would be a very good start, as would delaying the poorly designed Apprenticeship Levy,” he said.
The IoD survey showed business leaders believe that a widely anticipated cut to interest rates would not be enough to boost confidence significantly, with six in 10 saying it would make no difference.
The findings also reveal that seven in 10 business leaders want an increase in the Annual Investment Allowance to boost the economy and two-thirds think the Government should cut Corporation Tax.
On Wednesday, fears the Brexit vote could send Britain into recession mounted after figures signalled a shock contraction in the dominant services sector.
The dismal performance points to a 0.4% fall in gross domestic product (GDP) in the third quarter after surveys for the manufacturing and construction sectors also showed falling activity.