UK Economy Faces Gloom Amidst Tax Hike and Slowing Momentum

The UK government's tax increase decision caused a decline in private sector activity, marking the first contraction in a year. Businesses are apprehensive about potential job losses and economic slowdown, with concerns over manufacturing and rising costs impacting confidence and future growth prospects.

The British government's recent decision to raise taxes has led to a downturn in private sector activity, according to a recent survey. The S&P Global Flash Composite Purchasing Managers' Index fell to 49.9 in November, indicating contraction for the first time in over a year.

Chris Williamson, Chief Business Economist at S&P Global, described the economic scenario as "gloomy." The survey indicates a quarterly contraction at a rate of 0.1%, with potential job losses looming as confidence dips further.

The PMI report also highlighted worsening global economic prospects, particularly affecting the automotive industry. Finance Minister Rachel Reeves' budget, which increased employers' National Insurance contributions, has been met with concern from businesses about the implications for growth.

(With inputs from agencies.)