Business confidence has plunged to a 17-month low in a blow to Andy Burnham after his key party conference speech failed to reassure jittery bond markets.

Lloyds Bank’s business barometer showed confidence this month fell to the lowest level since April 2025.

The findings struck a sharp contrast with the Prime Minister’s pledge to ‘restore a higher level of growth and prosperity to Britain’.

Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said the fall in optimism was driven by rising global energy prices and increased global uncertainty.

Business groups yesterday gave a broad welcome to Burnham’s ambition.

But they urged him to give beleaguered firms ‘breathing space’ in the Budget from the growth-killing costs that have already been piled on by Labour.

Lloyds’ findings chimed with comments from the boss of Close Brothers, a lender to many of Britain’s small businesses, about the struggles they are facing. 

‘It has been a difficult year for all businesses,’ Mike Morgan told the Daily Mail, pointing to rising borrowing costs and uncertainty ahead of the Budget. 

He added: ‘It would be good to get some pro-business growth ideas coming through.’

Responding to Burnham’s speech, Rain Newton-Smith, chief executive of the Confederation of British Industry, said firms must be given ‘breathing space from the cumulative cost pressures holding back investment and hiring’.

And the PM’s speech left some in the City disappointed, with Kallum Pickering of Peel Hunt noting the ‘total absence of market-friendly or genuinely pro-growth initiatives’. 

Bond markets were also unimpressed, with borrowing costs ticking higher, while Yields on ten-year UK bonds, known as gilts, spiked to more than 5.42 per cent, just shy of the 19-year highs seen a day earlier, but ended slightly lower on the day.

Earlier, an auction saw Britain sell £4.25billion of ten-year gilts at the highest yield since 1999.

Businesses – which have been battered by employer National Insurance hikes, minimum wage increases and a raft of new workers’ rights under the Labour government – are hoping they will not have to face further punishment in the Budget.