Gloom about the economy is all around as Chancellor Rachel Reeves prepares to deliver her Spring Statement tomorrow.

Dwindling consumer confidence: More than half of the British public believe the economy is worsening, and only one in 10 think it is improving, according to research by KPMG, which found 58% of those it surveyed now think Britan’s finances are going in the wrong direction, up from 43% before Christmas. In consequence, households are now cutting back spending and saving more. They are eating out less, spending less on clothing and ordering fewer takeaways.

Plummeting Business Confidence: The British Chambers of Commerce (BCC) has warned again this morning that firms feel undermined by the Chancellor’s £25bn hike to Employee National Insurance Contributions (NICs), and called on her to reassure companies they will not be targeted again. BCC Director General Shevaun Haviland said: “Businesses are feeling battered and bruised by the heavy cost pressures looming within days. From next week, firms face an unpalatable menu of higher National Insurance (NI) and minimum wage bills, coupled with the impact of further US tariffs. There will be little escape for businesses, with our research showing 82% of firms will be impacted by just the NI rise.” He called for a “tax roadmap” to give businesses clarity on any future rises and give “a clearer idea of when costs will be lowered”.

A manufacturing slump: The latest S&P Global Purchasing Managers’ Index (PMI) suggests another decline in manufacturing, but an uptick in services. The index suggested that manufacturers are already suffering from USPresident Donald Trump’s tariff threats on steel and aluminium, as weak demand has led to declining export sales, as well as above-average inflation costs and a decline in manufacturers’ confidence. The UK manufacturing PMI reading fell further to 44.6 in March, an 18-month low, and below the global composite of 49.8. 50 is the magic figure which separates growth from contraction. Ben Jones, an economist at the Confederation of British Industry(CBI), told City AM he also blamed a fall in manufacturing output at the beginning of the year on Chancellor Rachel Reeves’ Employee NICs hike. Meanwhile, Shadow Business Secretary Andrew Griffith said: “Another day, another damning metric about the state of the UK economy. “Today’s manufacturing PMI shows the toll uncompetitively high energy costs and fears about Labour’s jobs tax and Employment Rights Bill are having on UK manufacturing businesses.”

The Government’s response? An HM Treasury spokesman said: “We are a pro-business Government and have already achieved a great deal in a short period of time. This includes protecting the smallest businesses from the employer National Insurance rise and late payments, and capping corporation tax. We delivered a once-in-a-parliament Budget to wipe the slate clean and without our action, business rates relief for retail, hospitality and leisure would have ended completely in April this year. We are now focused on creating opportunities for businesses to compete and access the finance they need to scale, export and break into new markets.”

In other business news…

More questions are being asked about Heathrow Airport’s closure on Friday last week, now power network supplier SSE has confirmed key electricity supplies continued uninterrupted despite the fire at a nearby National Grid substation. Two sets of cables into the airport remained “fully operational” according to SSE, thereby putting fresh pressure on Heathrow’s bosses to justify their decision to close the airport down completely. At the weekend, National Grid CEO John Pettigrew argued that Heathrow always had “enough power”. Heathrow maintains it could not have continued to operate as usual. A spokesman said: “Lessons can and will be learned. We have multiple sources of energy into Heathrow. When a source is interrupted, we have back up diesel generators and uninterruptable power supplies in place, and they all operated as expected. But our backup systems are safety systems which allow us to land aircraft and evacuate passengers safely – they are not designed to allow us to run a full operation”. A formal inquiry into the cause of the fire is ongoing.

Pimlico Plumbers founder Charlie Mullins has been accused of “bringing the honours system into disrepute” and may be stripped of his OBE, the Telegraph reports. The multimillionaire backer of Nigel Farage’s Reform UK political party, who sold his business in 2021 for an estimated £145m, risks losing his honour because of a social media attack on London Mayor Sir Sadiq Khan. The ‘secretive’ Honours Forfeiture Committee has now told him it is “minded to recommend to His Majesty that your OBE be revoked,” citing a controversial post about Khan and ‘offensive’ jokes made online and in person. Mullins has hit back, accusing the PM of a political revenge attack. He said receiving his OBE was the “proudest moment of my business career”. “When it’s not pinned on my jacket it’s proudly displayed on the wall of my apartment next to a photo of Winston Churchill,” he told the newspaper. The Cabinet Office declined to comment.

Bank of England (BoE) Governor Andrew Bailey has warned Donald Trump’s tariffs and Britain’s ageing population are major obstacles to growth. Older people cannot be relied upon to boost GDP, he claimed in a speech to the University of Leicester, arguing that instead Britain we will need to rely on the benefits of “some quite large technological advance”, such as artificial intelligence (AI). “The story of growth is, I am afraid, quite clear. It has slowed markedly in the last 15 years or so, and this has affected the advance of living standards. We face a necessary challenge to raise the potential growth rate of the economy,” he said, adding: “AI appears to me to have that potential, and so it could over time lift growth rates and per capita national income.” Openness in trade will also be critical to boosting Britain’s economic fortunes, he said.

The Financial Conduct Authority (FCA) will be encouraging retail investors to up their level of risk when managing their savings as part of its mandate to support growth in the UK economy, The Financial Times reports. FCA chair Ashley Alder told the newspaper the advice has been drawn up the plans as part of a new five-year strategy to be launched later this week, and that pushing investors towards a “rebalancing of risk” is expected to be a key part of the strategy. Alder described “the risk of not deciding to, for example, participate in or access financial products or services that can lead to greater long-term returns,” saying that the FCA would “supply retail consumers with far better tools to do this thing that is informed risk-taking,” while maintaining existing protections for consumers. “If you were able to increase the trust in the system and therefore increase the level of participation in products and services, clearly you would then end up with a greater level of savings being converted into investments via markets,” he added. The FCA is one of several regulators charged by Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer to prioritise growth and minimise red tape and, writing in City AM this morning, CEO Nikhil Rathi said the financial regulator had presented the Prime Minister with almost 50 measures designed to do that “while maintaining high standards”. His article is here: https://www.cityam.com/the-fca-will-boost-growth-by-being-a-smarter-regulator/

EU rules on ethical investing introduced four years’ ago are blocking almost £100bn in funds from flowing into thedefence industry, according to analysts at Morgan Stanley. The investment bank suggested the EU relax the rules to allow Europe’s environmental, social and governance (ESG) funds to invest billions in the industry as it looks to bulk up its own defences amid President Trump’s threats to withdraw US support for the Ukraine war. Last week, the European Commission President Ursula von der Leyen outlined plans to provide €150bn (£125bn) in funds to a new defence fund, however France has secured an ‘EU-only’ approach that restricts purchases from British arms companies.

Morrisons is to close 17 of its convenience stores, 52 in-store cafes, all 18 of its Market Kitchen hot food counters, 13 florists, 35 meat counters, 35 fish counters, and four pharmacies, all of which are said to be “uneconomic”. The cuts, which put 365 jobs at risk nationwide, are part of a wider cost-cutting strategy under CEO Rami Baitiéh, and a response to "significant cost increases". It is believed the hike in Employee NICs alone will add around £5m to Morrisons’ annual costs. The supermarket chain is the UK's fifth largest after Tesco, J Sainsbury, Asda and Aldi.

TV star Ant Middleton and his wife Emilie have been banned from being company directors for four years after their business, Sway and Starting Limited - set up to manage income from his television and media work - failed to pay more than £1m in VAT and Corporation Tax between 2019 and 2022. When the company went into liquidation, the Insolvency Service found its bank accounts showed £4,592,200 was paid into the company between April 2020 and November 2022. This, the Government’s press release on the matter said, indicated “it had enough income to pay the tax it owed in full”.

A restaurant owned by former Manchester United star Ryan Giggs, George’s Dining Room and Bar in Worsley, Manchester, has been found to have owed almost £500,000 when it collapsed. The business closed in February, going into voluntary liquidation. Giggs opened it with friends Kelvin Gregory and Bernie Taylor in 2014. According to documents lodged at Companies House, the company owed £389,454 to ordinary unsecured creditors, including to HMRC and a Covid-era Bounce Back Loan. Other creditors include Natwest, British Gas and Carlsberg Marton’s Brewing Company. Giggs himself is owed almost £100,000, Taylor almost £13,000 and Gregory more than £53,000.

Manchester-based fast-fashion brand In The Style owed £21m when it was rescued after collapsing into administration, it has been revealed. The company was rescued by Alps Sourcing Limited last week in a deal which secured 87 jobs. The debts include tax due to HMRC of just under £1.5m and almost 200 unsecured creditors over £4.5m. It also has outstanding book debts of around £351,408. In The Style was founded by Adam Frisby in 2013 and was previously listed on the London Stock Exchange’s AIM market, before being sold in a fire sale to Baaj Capital for just over £1m in March 2023.

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