Britain’s Institute of Directors (IoD) reported on Sunday that business confidence among its members has plummeted to its lowest level since the onset of the COVID-19 pandemic, following tax increases outlined in Finance Minister Rachel Reeves’ first budget on October 30.

The survey revealed that investment plans and employment intentions are at their weakest since May 2020. A key measure of business leaders’ optimism fell to -65, the lowest since April 2020, down from -52 in October.

“As businesses continue to absorb the impact of the Budget on their plans, confidence has continued to decline,” said IoD Chief Economist Anna Leach. “Rather than strengthening the foundations, the Budget has undermined them, harming the private sector’s ability to invest in their businesses and workforce.”

This report adds to the growing concerns among businesses since the budget announcement, highlighting signs of an economic slowdown. Last week, Reeves assured the Confederation of British Industry that she would not introduce additional borrowing or further tax increases in future budgets.

During her budget announcement, Reeves revealed £40 billion ($51 billion) in tax rises, including a £25 billion increase in employers’ annual social security contributions. Prior to the election, Labour had indicated only £8 billion in tax increases, with Reeves attributing the additional measures largely to an unexpectedly poor fiscal legacy from the previous Conservative government.

The IoD also noted that proposed changes to employment laws are likely to increase costs for employers.

The survey, conducted between November 15 and November 27, included responses from 601 participants, primarily from small businesses.