West Midlands businesses facing 'pivotal moment' as they 'wait and see' on autumn budget

That' the view of KPMG senior partner Andy Bostock who said said businesses are currently taking a 'wait-and-see approach' regarding recruitment and investment decisions until a clearer picture emerges.

"Generally, the economy is projected to grow at a modest pace in the short term, with inflation gradually returning to target," he said.

"However, the ongoing geopolitical situation and potential tax changes in the upcoming budget create a climate of uncertainty for businesses.

"There’s certainly lots of speculation of policy changes on the horizon. This has led to a wait-and-see approach from businesses.

"This has somewhat been evident in the reported slowdown in both temporary and permanent hiring in the West Midlands by recruiters.

"On the jobs front, the labour market is showing signs of loosening, with fewer vacancies and slowing pay growth, presenting both challenges and opportunities for businesses. "While finding skilled workers may become easier, addressing the persistent skills gap remains crucial for long-term competitiveness. Investing in training and development programs will be essential to equip the workforce with the necessary skills for the future."

He said investment is expected to accelerate in the coming years, driven by lower interest rates and government policies aimed at boosting economic growth.

"However, potential changes to capital gains tax in the Autumn Budget could impact some investment decisions," Mr Bostock warned.

"Reliefs are another option that could come in the budget.

"We could see the government reforming Business Asset Disposal Relief either to better target entrepreneurial behaviour, or perhaps a bigger reform that incentivises initial investment or scale-up rather than exit.

"It has been noted in the deals market that for processes already live and at an advanced stage, vendors don’t want to leave anything to chance and are focused on closing deals ahead of the Autumn Budget.

"There is also a wave of new deals where the focus is on closing ahead of the end of the current tax year, so corporate finance teams are busy doing lots of preparation in anticipation of bringing these opportunities to market."

Mr Bostock said: "Overall, the West Midlands has a strong foundation for business success. A vibrant business community, a skilled workforce supported by strong educational institutions, improving infrastructure, and a strategic location make the region well-positioned to capitalise on emerging opportunities.

"Clarity on policies that affect business, further funding for infrastructure and policies that support inward investment and driving new technologies will go a long way post budget."