Confidence among business leaders in Labour has waned due to concerns over potential tax increases and changes to workers' rights, according to a survey by the Institute of Directors (IoD).
After an initial rise in optimism when the new government took power, the IoD’s latest reading reveals a decline, particularly in business investment and employment expectations.
Revenue, exports, and wages are also projected to decrease. The drop in confidence coincides with Labour's focus on economic growth and efforts to address a £22 billion deficit in public finances.
Critics argue that proposed tax hikes and employment reforms could harm business investment, particularly in sectors such as energy.
The IoD is urging the government to ensure policies are well-designed for long-term stability. Business leaders warn that increasing taxes, such as those on capital gains, could drive investment away from the UK, potentially weakening the economy.