Business confidence in Britain has plummeted to its lowest level since the aftermath of Liz Truss’s controversial mini-budget, according to new data from the British Chambers of Commerce (BCC).

A survey of 4,808 firms revealed that only 49% of businesses expect their income to rise in the next 12 months, reflecting a drop in optimism to levels last seen in the final quarter of 2022. The decline in confidence coincides with Chancellor Rachel Reeves’s recent decision to raise £40 billion in taxes, primarily targeting businesses.

Key measures in the tax overhaul include increases to national insurance contributions (NICs), such as a rise in employers’ NICs from 13.8% to 15%, as well as a lower threshold for contributions. Over 60% of businesses surveyed cited taxation as a major concern, leading to uncertainty within the corporate sector.

However, a separate report from KPMG presents a more optimistic outlook for the UK economy. Despite the dip in business confidence, KPMG forecasts that the UK economy will likely grow faster than expected this year. The report credits the Chancellor’s additional public spending and a potential reduction in interest rates to around 4% as factors that could drive economic growth. KPMG has revised its growth projection for 2025 to 1.7%, up from an estimated 0.8% growth in 2024, though it warned that inflation will remain above the Bank of England’s 2% target until at least 2027.

The drop in confidence parallels the turbulence triggered by Truss’s brief premiership, which saw a £45 billion package of unfunded tax cuts cause turmoil in financial markets, leading to an emergency intervention by the Bank of England. In contrast, Chancellor Reeves’s October budget aimed to restore stability with a combination of tax hikes and £30 billion in additional borrowing to fund a major public investment program.

Shevaun Haviland, director-general of the BCC, criticized the budget measures, stating that businesses are already scaling back investments and planning to raise prices in the face of higher taxes. KPMG’s economists echoed this concern, suggesting that the tax increases could lead to inflationary pressures as businesses pass on the costs to consumers, even as fiscal stimulus boosts short-term demand.

A Treasury spokesperson defended the budget, calling it a “once-in-a-parliament” initiative designed to restore stability and provide businesses with certainty amid a challenging economic environment.

Britain must adhere to its plan to stop selling new full hybrid cars without a plug by 2030, or risk a “catastrophic misstep” that could derail its net-zero ambitions, according to the motoring group Electric Vehicles UK (EVUK).

The Department for Transport (DfT) plans to enforce a ban on the sale of new purely petrol and diesel cars starting 1 January 2030. Currently, a consultation is underway to determine which types of hybrid vehicles could remain on sale until the end of 2034. Full hybrids, such as the Toyota Prius, use an internal combustion engine to recharge their batteries and can only travel a short distance on electric power alone.

Dan Caesar, chief executive of EVUK, strongly warned that allowing full hybrids to remain on the market would be a major setback, undermining public confidence in the shift to fully electric vehicles. Caesar emphasized that while he supports allowing plug-in hybrids — which can drive longer distances on electric power alone — to remain on sale until 2035, full hybrids do not contribute to genuine zero-emission motoring. “Permitting full hybrids would erode public trust in the transition to electric vehicles,” Caesar said.

Dr Andy Palmer, former chief executive of Aston Martin and former operating chief of Nissan, also weighed in, acknowledging that while full hybrids are better than mild hybrids, they “belong to the late 1990s.” Palmer echoed concerns that full hybrids do not offer meaningful progress toward reducing emissions.

Under the zero-emission vehicles (ZEV) mandate introduced this year, car manufacturers are required to sell a certain percentage of pure electric vehicles annually. This target begins at 22% in 2024 and rises to 80% by 2030. However, some industry stakeholders, including Stellantis (the owner of Vauxhall), have voiced concerns over potential job losses if the timeline for phasing out hybrids remains as planned.

A spokesperson for the Department for Transport reassured that the government intends to work closely with the automotive industry to ensure a smooth transition, pointing out that “drivers are already embracing electric vehicles faster than ever.” The DfT’s efforts aim to encourage a sustainable future, with an emphasis on electric vehicles as the key to achieving net-zero emissions by 2050.

As the 2030 deadline approaches, debates over the role of hybrid vehicles in the transition to electric transportation continue to be a focal point for policymakers and industry leaders alike.

Plans for the introduction of a UK “digital pound” are facing significant challenges as Bank of England officials grow increasingly sceptical about the project. The idea of a central bank digital currency (CBDC), often referred to as “Britcoin,” was initially slated for a formal decision in 2025, with an expected launch by 2030. However, concerns surrounding privacy, costs, and persistent conspiracy theories are raising fresh doubts about whether the digital pound will ever come to fruition.

A digital pound would theoretically offer consumers a secure, electronic form of money, with transactions managed through smartphone apps and underpinned by the safety of central bank backing. However, some critics, including certain politicians and conspiracy theorists, fear that a CBDC could enable the government to monitor and control citizens’ spending. Nigel Farage, leader of the Reform Party, has warned that a digital pound could give the state “total control over our lives.”

These concerns, combined with the practical challenges of creating a national digital currency, have put the project in jeopardy. According to sources familiar with the discussions, Bank of England officials remain divided on whether the benefits of a digital pound outweigh its potential risks. The final decision will ultimately rest with Bank governor Andrew Bailey and Chancellor Rachel Reeves.

The global context is also complicating the UK’s plans. In the United States, lawmakers recently passed an “anti-surveillance” bill in the House of Representatives, aiming to block the launch of a digital dollar unless Congress explicitly authorizes it. Meanwhile, the European Central Bank is expected to make a decision by the end of 2025 on whether to proceed with the development of a digital euro, despite resistance from Germany’s conservative Christian Democrats, who are concerned about user privacy.

This hesitation reflects broader caution over CBDCs, particularly those intended for everyday use by retail customers. While the UK and European authorities initially viewed CBDCs as a necessary response to private stablecoins, such as Facebook’s now-defunct Libra, enthusiasm has waned due to technical and political challenges.

Despite growing skepticism over retail-focused digital currencies, the push for a “wholesale” CBDC, intended for use among commercial banks and financial institutions, remains strong. Policymakers believe that a wholesale CBDC could streamline interbank transactions and reduce systemic risks without raising the same privacy concerns.

A Bank of England spokesperson confirmed that work on the digital pound is still “ongoing,” with no formal decision yet made on whether to proceed. The spokesperson emphasized that, should a digital pound be introduced, it would be accompanied by primary legislation to safeguard user privacy and control over their funds.