Burnham is ‘not behind’ business confidence bounce

Industry leaders have downplayed the impact of Andy Burnham's return to Westminster on the recent surge in business confidence. Although some analysts have attributed the increased optimism among businesses and consumers to a "Burnham bounce" since Sir Keir Starmer resigned, the Institute of Directors (IoD) clarified that Burnham's political appointment has not contributed to the rise in sentiment.

The IoD reported that its main business confidence reading for the UK economy's prospects improved from -63 in July to -49 in August, while bosses' confidence in their own organizations declined by three points to -5. IoD chief economist Anna Leach stated that the modest uptick in business confidence was not driven by Burnham's presence, as new Prime Minister Sir Keir Starmer and his Cabinet had generally reduced optimism regarding both the UK economy and their own organizations.

She noted that while some welcomed the change in tone and the devolution agenda, the majority remained concerned about unfunded spending commitments and potential tax increases. The improved business confidence, according to Leach, is mainly due to better international growth and business resilience. The IoD's survey echoed similar findings from Lloyds Bank, which reported that optimism among larger firms reached its highest level since March.

Moreover, the survey indicated that firms would raise prices by smaller margins than anticipated, helping to alleviate inflation concerns. The Confederation of British Industry (CBI) also echoed the sentiment, stating that pessimism in the private sector had faded, as expectations for growth were the "least negative in two years."

However, the CBI's research revealed a mixed outlook for different sectors, with business and professional services firms being more optimistic than consumer-facing services.