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>>The UK’s Deputy Prime Minister is urging business leaders to highlight positive economic sentiment ahead of the budget, which includes tax increases.

The UK’s Deputy Prime Minister is urging business leaders to highlight positive economic sentiment ahead of the budget, which includes tax increases.

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3 days ago

Government's Confidence Campaign

The UK government, led by Chancellor Rachel Reeves, is actively encouraging business leaders to publicly express confidence in Britain’s economy. This push comes ahead of a tax-raising budget and aims to counter negative sentiment that could benefit Reform UK. Treasury officials have been urging CEOs to make positive statements about government policies and the UK's investment credentials. Reeves' absence from public engagements is framed as avoiding a "gutless" approach and preventing a downward spiral of pessimism.

Economic Concerns and Fiscal Challenges

Many business leaders remain apprehensive about Chancellor Reeves' upcoming budget, which anticipates corporate and personal tax increases to address a fiscal gap. Some CEOs feel Reeves is sending conflicting signals, first highlighting financial weaknesses and then demanding optimism. Previous proposals, like increasing employer national insurance contributions, have also raised concerns about employment costs and hiring. Despite these anxieties, the Treasury emphasizes improving economic fundamentals.

Addressing Reform UK and Political Strategy

A primary driver of the government’s campaign is to diminish the appeal of Reform UK, which is gaining traction with disillusioned voters. Labour strategists fear Reform UK's policies could damage key institutions and disrupt trade relationships. Microsoft’s substantial investment plan in the UK demonstrates renewed confidence in the governance and innovation environment.