The chancellor's growth mission is missing in action | Nils Pratley

"Where was the applause for the budget from the business world? Well, there was the banking sector, but it was reportedly under strong encouragement from the Treasury to engage in a round of corporate cheerleading after being spared higher levies. Nor should one get carried away by JP Morgan's coordinated announcement of a new 3bn office in Canary Wharf. Yes, the commitment shows some level of long-term confidence in the UK, but large international banks do not make property decisions on the basis of what they heard one afternoon."

"In the non-banking business world, the broad day-after reaction to the budget can be summarised as a resigned shrug coupled with amazement that the chancellor, Rachel Reeves, offered so few pro-growth measures even as the Office for Budget Responsibility set out two depressing forecasts. First, that the average growth rate for the economy from 2026 to 2029 will be only 1.5%, rather than the 1.8% expected in March. Second, real-terms annual growth in disposable incomes will be tiny."

"One FTSE 100 chair puts it this way: There were no positive themes to hold on to or to build on. There was nothing structural to move us forward. The sense of distrust is very high. That distrust flows, of course, from the long weeks of briefing and speculation in the runup to the budget, which won't be forgotten in a hurry. Income tax hikes were out, then in, then out again."

The banking sector voiced praise after being spared higher levies, reportedly following strong encouragement from the Treasury to engage in corporate cheerleading. JP Morgan's planned 3bn Canary Wharf office signals some long-term confidence, but such property decisions are not made on a single afternoon's announcements. Non-banking firms reacted with a resigned shrug and amazement at the scarcity of pro-growth measures. The Office for Budget Responsibility forecast average GDP growth of 1.5% from 2026–2029 and minimal real-terms annual growth in disposable incomes. Executives noted a lack of structural initiatives, high distrust after prolonged pre-budget briefing and tax U-turns, while calmer bond markets may allow earlier Bank of England rate cuts.

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