UK Business Confidence Plummets: Xi Jinping’s Exclusive Meeting with Chinese Business Leaders – Live Updates

Good morning! Welcome to our updates on business and the economy.

It looks like UK small businesses are feeling less confident lately. Many owners are worried about the economy, higher taxes, and rising wages.

The latest Small Business Index (SBI) from the Federation of Small Businesses shows a sharp drop in optimism. The index fell to its lowest point outside the Covid-19 pandemic, dropping from -24.4 points in the third quarter to -64.5 points in the last quarter of the year.

This survey reflects the period when businesses were waiting for and then digesting a budget from Rachel Reeves that included increased employer national insurance contributions. According to the FSB, the accommodation and food services sector is the least optimistic, followed by wholesale and retail. The construction sector saw a significant drop, with confidence plummeting from -26.6 to -76.8 points.

Tina McKenzie, the FSB’s policy chair, shared her concerns:

“The fourth quarter blues reported by small firms underline how urgently the Government’s growth push is needed. Small firms are understandably nervous about their prospects as 2025 gets underway.”

“The upcoming Employment Rights Bill is a significant source of stress for small firms, with nine out of ten business owners voicing concerns about it. This is likely a major reason for the current low confidence levels.”

In related news, a survey from the Chartered Institute of Personnel and Development found that UK employers are bracing for the biggest round of layoffs in a decade, citing budget tax increases as a leading cause. Many employers pointed to the rise in national insurance contributions and a substantial increase in the national living wage.

On a different note, in Beijing, Chinese President Xi Jinping recently hosted a rare meeting with prominent business leaders. This gathering included major figures from companies like Huawei, Xiaomi, and BYD. Notably, Alibaba’s co-founder Jack Ma made an appearance. He had previously remained low-key following regulatory pressures that hit Alibaba hard.

This meeting is seen as a possible shift in the government’s approach to private businesses, particularly as China faces economic pressures and trade tensions with the US. Christopher Beddor from Gavekal Dragonomics commented, “This indicates that the Chinese government needs private firms to maintain its tech edge against the US. Supporting the private sector is essential for the government to compete effectively.”

As markets respond to these developments, we’ll continue to provide updates on how businesses and economies are navigating these challenges.

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