Businesses Brace as UK Borrowing Rises and Poll Shows Majority Expect Autumn Budget to Hurt Firms

Rising borrowing and souring sentiment pile pressure on the Chancellor

Two fresh pieces of data ahead of the autumn Budget have sharpened the choice facing the Treasury. Official statistics show public sector borrowing in September rose to levels above forecasts, while a new YouGov survey finds a majority of business leaders expect John Healey's Budget, due on October 28, to make firms worse off. Together the figures are adding to market and corporate concern about what trade offs the Government will take to close its fiscal gap.

What the numbers say

The Office for National Statistics reported that public sector net borrowing in September 2026 was 24.5 billion pounds, around 1.8 billion higher than a year earlier and notably above the latest independent forecast. The ONS also produced a provisional estimate that public sector net debt has passed the 3 trillion pound mark for the first time, a level that will figure in any Treasury calculation of how much fiscal room exists for new spending or tax reliefs.

Separately, YouGov polled 2,010 business decision makers between October 5 and October 19 and found 52 percent expect the forthcoming Autumn Budget to leave businesses either worse off or significantly worse off, while only 15 percent anticipated an improvement. The survey highlights differences by company size, with smaller firms more pessimistic in some areas such as cashflow and regulatory burden, and larger employers more likely to flag recruitment and retention as top concerns.

Why this matters for companies

Higher than forecast borrowing and a rising headline debt figure narrow the Chancellor's options. With the Autumn Budget six days away, ministers must weigh between revenue measures, spending cuts, or a combination of both if they are to meet fiscal targets set out by the Office for Budget Responsibility and reassure markets. That choice has direct implications for businesses. Targeted tax increases or cuts to business support could weaken investment incentives, while spending restraint could mean slower public investment and weaker near term demand for companies that rely on government contracts.

For small and medium sized companies the YouGov results point to a broader concern about operational pressures. Cashflow and regulatory red tape featured among the top worries, and business leaders told pollsters that economic instability and slower growth were key threats ahead of the Budget. Those fears can translate quickly into postponed hiring and delayed capital expenditure, magnifying any near term drag on the wider economy.

How markets and advisers are reacting

Investors and market commentators are already parsing the ONS numbers and survey results for clues about tax and spending moves. Higher borrowing can push up debt interest costs, creating additional fiscal strain in this environment of elevated global rates. Advisers to corporate clients say the combination of tougher public finances and negative business sentiment encourages boards to revisit budgets, prioritise liquidity, and accelerate contingency planning.

Industry bodies have been urging the Government to adopt measures that protect business investment while narrowing the fiscal shortfall. Some trade groups want targeted reliefs for R and D and capital allowances, others press for immediate business rates reform to ease the cost burden on high street firms. Policymakers face a balancing act because measures that are popular with business groups may not be politically or numerically sufficient to close the gap signalled by the ONS figures.

Choices facing the Chancellor

With the Budget scheduled for October 28, the Treasury has limited time to set out a credible plan. Options include selective tax rises on wealth or business, reworking the structure of business rates, altering reliefs and allowances to raise revenue, or tightening departmental spending plans. Any move perceived to penalise firms may deepen the pessimism captured by YouGov, but failing to act risks a further deterioration in public finances and greater pressure from investors.

Officials are also likely to be watching second round effects. If households and firms pull back sharply on spending and investment in response to fiscal adjustments, tax receipts could underperform, complicating the fiscal arithmetic even further. That dynamic helps explain why business sentiment and official borrowing data are being read together as a real time indicator of the Budget problem set.

What companies can do now

Advisers recommend that firms take a pragmatic approach in the coming fortnight. That includes stress testing cashflow under a range of Budget scenarios, reviewing near term capital projects, and refreshing workforce plans to ensure optionality. For businesses that depend on public sector contracts, senior managers should revisit pipeline assumptions and contract clauses that could be affected by tighter public spending.

For policymakers, the challenge is equally immediate. They must craft a package that stabilises the public finances while limiting damage to growth and confidence. How the Chancellor navigates that trade off will shape the outlook for investment and hiring across the private sector in the months that follow the Budget.

The coming week is therefore likely to be decisive. The ONS borrowing print and YouGov sentiment survey have not resolved the Government’s choices, but they have clarified the scale of the fiscal trade offs that ministers will need to explain to businesses, voters, and markets when the Autumn Budget is unveiled on October 28.