Conservatives sound the alarm as Labour’s Budget uncertainty bites

• New research links stalling growth to Budget anxiety
• Retail sales fall unexpectedly as consumers hold their breath
• Grim news for the economy in the run-up to Christmas

The Conservatives are today [Friday 21 November] sounding the alarm as new data reveals Budget uncertainty has led to an economic slump.

The S&P Global Flash PMI today revealed “economic growth has stalled, job losses have accelerated, and business confidence has deteriorated” due to concerns about Labour's next Budget.Worryingly, it warned that there is “a real chance” this could develop into downturn.

Budget anxiety is hitting consumers too, with ONS data published today showing retail sales fell unexpectedly in October, despite the approach of Christmas. Data from GfK also shows a fall in confidence - a “bleak set of results” which, the firm says, “suggests the public is bracing for difficult news, with little in the current climate to lift expectations.”

This grim news follows other data published yesterday that shows business and consumer confidence have fallen in the run up to the Budget. The British Retail Consortium reported that 60 per cent of people expect the economy to worsen in the next three months. Meanwhile the CBI industrial trends survey shows manufacturing output fell in the three months to November, at the fastest pace since August 2020, and manufacturers expect volumes to decline at a similar pace in the three months to February.

Budget speculation has intensified thanks to Labour's constant u-turns and indecision. But one thing is clear: tax rises are coming, because Labour don't have the backbone to get spending under control. That will mean higher costs for businesses and for ordinary people, and further damage to our economy.

Andrew Griffith MP, Shadow Business and Trade Secretary, said:

“As winter draws in it brings grim news for Rachel Reeves and for the country. An economic slump, declining confidence and falling retail sales: these are the effects of Reeves' uncertainty, hanging like a wet blanket over the economy.

“Her tax hikes have already strangled growth. And now with her speculation and u-turns she's managed to do further damage to business before she even stands up to deliver her Budget speech.

“Labour don't have the backbone to control spending and that means tax rises are coming. Only the Conservatives have the plan to deliver a stronger economy.”

ENDS

Notes to Editors:

Labour inherited a recovering economy:

• Labour inherited the fastest growing economy in the G7. Labour inherited the fastest growing economy in the G7 when 0.7 per cent growth was recorded between January and March 2024 (ONS, GDP Quarterly national Accounts, UK: January to March 2024, 28 June 2024, link).
• Labour inherited inflation at two per cent. After inflation reached 11.1 per cent in October 2022 in the wake of the pandemic and Russia's illegal invasion of Ukraine, it was brought down to 2.0 per cent by June 2024 – bang on the Bank of England's target (ONS, Consumer price inflation time series (MM23), 17 July 2024, link).
• Labour inherited falling borrowing and a budget deficit of 4.4 per cent – less than half of what it was in 2010. Labour left Public Sector Net Borrowing at 10.3 per cent of GDP in 2010, they inherited it at 4.4 per cent, forecast to fall 1.2 per cent by 2028-29 (OBR, Public finances databank 2023-24, 25 April 2024, link). 

Labour's first Budget trapped Britain in a doom loop of high spending, more borrowing and higher taxes:

• Labour increased spending by half a trillion pounds. Labour plan to spend half a trillion pounds – £485 billion – more over the course of the Parliament than the plans they inherited, despite Rachel Reeves' claim Labour's policies were ‘fully costed, fully funded and deliverable within [our] inheritance' (OBR, Economic and Fiscal Outlook, 26 March 2025, link; BBC Breakfast, 8 February 2024, archived).
• Labour ‘fiddled the figures' to borrow more, doubling the deficit. Despite promising not to ‘fiddle the figures', Labour announced a new fiscal rule, increasing Public Sector Net Borrowing from £39.4 billion to £77.4 billion in 2028-29 – doubling the deficit (OBR, Economic and Fiscal Outlook, 30 October 2025, link; OBR, Economic and Fiscal Outlook, 26 March 2025, link).
• Labour hiked taxes to a ‘historic high'. Labour's last Budget raised taxes by £40 billion – far above the £7 billion of tax hikes in their manifesto – pushing the tax burden to a historic high of 37.7 per cent of GDP. Despite their manifesto pledge to avoid tax hikes on ‘working people', Rachel Reeves introduced a Jobs Tax that the independent Institute for Fiscal Studies (IFS) said will be paid for ‘largely by working people' and increase the cost of employment by £900 for the average worker (OBR, Economic and Fiscal Outlook, 26 March 2025, link; The Labour Party, Change, 13 June 2024, link; IFS, IFS Initial Response to Autumn Budget 2024, 30 October 2024, link).

Uncertainty around Labour's next Budget is harming the economy:

• S&P Global Flash PMI said ‘economic growth has stalled, job losses have accelerated, and business confidence gas deteriorated' due to concerns about Labour's next Budget. ‘November's flash PMI surveys brought disappointing news on the UK economy. Economic growth has stalled, job losses have accelerated, and business confidence has deteriorated… Some of this malaise has been blamed on paused spending decisions ahead of the Autumn Budget, but there's a real chance this pause may turn into a downturn' (S&P Global, Flash PMI, 21 November 2025, link).
• The Office for National Statistics has shown retail sales fell unexpectedly in October, for the first time since May. The figures show retail sales by volume fell 1.1% during October. (ONS, 21 November 2025, link.)

• The GfK Consumer Confidence Barometer showed that all measures of consumer confidence fell in September.The Barometer showed that all consumer confidence measures were down including personal financial situation over the last 12 months, predictions of personal financial situation over the next 12 months, the general economic situation over the last 12 months, and predictions of general economic situation over the next 12 months (NIQ, Press Release, 21 November 2025, link).

• Neil Bellamy, Consumer Insights Director at GfK, said the findings of the Consumer Confidence Barometer were ‘bleak'. BELLAMY: ‘This is a bleak set of results as we head towards next week's Budget. A fall across all five measures suggests the public is bracing for difficult news, with little in the current climate to lift expectations. The continued erosion of confidence is evident in the forward-looking measures for both Personal Financial Situation and the General Economic Situation, which are each down by two points' (NIQ, Press Release, 21 November 2025, link).

• The British Retail Consortium (BRC) has said that 60 per cent of Britons expect the economy to worsen over the next three months. According to the BRC's Consumer Sentiment Monitor, 60 per cent of Britons expect the economy to worsen over the next three months with just 14 per cent expecting it to improve. This is the worst reading for business confidence since April. Helen Dickinson, CEO of the BRC, said that ‘it has been a tumultuous month of budget speculation' (Bloomberg, 20 November 2025, link; Halifax, accessed 20 November 2025, link).
• The Confederation of British Industry (CBI) found that manufacturing output has fallen at the fastest rate since August 2020, with orders at a ‘historically weak level'. The CBI's Industrial Trends Survey found that in the three months to November manufacturing output fell at the fastest rate since August 2020, with manufacturers expecting volumes to decline at a similar pace over the next three months. Ben Jones, Lead Economist at the CBI, said: ‘What's striking in this month's survey is how consistently firms link the slowdown to uncertainty ahead of the Budget, with customers delaying purchases and investment until they know what's coming' (CBI, Press Release, 20 November 2025, link).

The Conservatives will stabilise the public finances – allowing us to cut tax:

• We will deliver £47 billion of savings. Under our Golden Economic Rule, for every pound saved, at least half will go to cutting the deficit, with the remainder being used to getting our economy moving. We will deliver these savings by:
• • Cutting welfare spending (£23 billion)
  • Reducing the size of the Civil Service (£8 billion)
  • Cutting spending on social housing for foreign nationals (£3.9 billion)
  • Reducing the cost of the asylum system (£3.5 billion)
  • Abolishing Net Zero schemes (£1.6 billion)
  • Cutting back on overseas aid (£7 billion)
• This means we can cut tax. At Conservative Party Conference, we announced our plan to:
• • Abolish Stamp Duty on primary residences, helping more families achieve the dream of home ownership. Under our plan, Stamp Duty Land Tax, which is paid when you buy a property or land in England and Northern Ireland, will be abolished for primary residences (GOV.UK, Stamp Duty Land Tax, accessed 20 November 2025, link).
  • Abolish Business Rates for Retail, Hospitality and Leisure businesses, benefitting 250,000 businesses and reviving our high streets. We would introduce permanent 100 per cent business rates relief for Retail, Hospitality and Leisure businesses – benefitting 250,000 businesses (HMT, Press Release, 13 November 2024, link).
  • Introduce a £5,000 First Jobs Bonus, backing the next generation. Under our plan, the first £5,000 of National Insurance paid by any British citizen starting their first job will be placed into a personal savings account – earmarked for a first home deposit or future savings.