ISSUE NO. 26 · TUESDAY 8 SEPTEMBER 2026

Optimism at its best since 2024, four thousand jobs going at Jaguar Land Rover, and a gilt yield the Budget has to live with

British firms have not felt this good since just before the 2024 Autumn Budget. BDO’s optimism index reached 94.22 in August and its output index hit 98.37, the strongest since January 2025 — while its employment index did almost nothing, sitting at 93.10, only just above a recent 15-year low. Firms are producing more and taking nobody on, which is Britain’s labour market in two numbers.

The proof arrived the same day. Jaguar Land Rover is cutting 4,000 jobs and the government has ruled out paying to stop it, after pre-tax profit fell more than two thirds to £109m, with US tariffs sitting on a market that takes 29 per cent of its sales. The 10-year gilt touched 5.294 per cent last week, its highest since 2008, and Arthur Laffer picked that moment to tell Britain it is taxing itself into a death spiral. John Healey, meanwhile, went north with £150m for start-ups and university spin-outs — bait for private money rather than a subsidy, and a very small sum weeks before a Budget that will be settled on business rates and the cost of employing anybody at all.

Below in full: the gap between how firms feel and who they hire, why JLR is buying itself a smaller break-even, and what a 5.294 per cent gilt does to the Chancellor’s room. After those, four numbers, the diary, and one calculator.

Lead

UK business confidence has climbed to its highest point since just before the 2024 Autumn Budget, but the hiring line on the same chart has barely twitched.

BDO’s optimism index reached 94.22 in August, and its output index rose to 98.37, the strongest reading since January 2025 — services doing most of the work, with weak export demand holding the headline back. The employment index did almost nothing: 93.10, only just above a recent 15-year low. So firms feel better, are producing more, and are still not taking anyone on. Sentiment is free; a hire is a cost that lands every month, and the costs firms keep naming are business rates, energy and the tax on employing someone. Healey’s Budget arrives next month with one job — make it cheaper to add a person, not just cheaper to feel good. What he does with costs will decide whether any of this becomes jobs. Read the full story →

The Numbers

Bank Rate is 3.75% with nine days to the 17 September decision, and CPI is still July’s 2.9%. The gilt is the card that moved: 5.16% at the start of this month against 5.14% in August, and last week’s peak was higher still. The index below ended Friday four tenths of a point below Thursday’s close, which rounds to nothing at all, and its twelve-month low has rolled up to 9,196.

More News

Britain’s biggest carmaker is cutting 4,000 jobs, and ministers have ruled out paying to stop it.

The programme is voluntary, which controls the cost without controlling which skills walk out of the door. Pre-tax profit fell more than two thirds to £109m as revenue dropped nearly 10 per cent in the three months to June, and North America — the biggest market, at 29 per cent of sales — has been carrying US tariffs all year. JLR is targeting £1.7bn of savings over the next two years and wants its break-even down to 300,000 vehicles, which is a company planning to sell fewer cars and survive it. The business secretary has drawn the line at co-investment rather than rescue: state money for long-term projects, none for holding a headcount steady. Voluntary redundancy is still redundancy, and the rest of the economy absorbs the bill through the supply chain. Read the full story →

Britain’s 10-year gilt yield touched 5.294 per cent last week, the highest since 2008, and the Budget is still a month away.

Arthur Laffer — the economist behind the curve that carries his name, and an adviser to Ronald Reagan, Bill Clinton and Donald Trump — reckons Britain is taxing itself into a death spiral. The curve’s actual claim is narrower than the politics built on it: past some rate, raising it further collects less rather than more. It is silent on where that point sits, which is exactly what everyone argues about. What is not in dispute is the price. A 5.294 per cent 10-year gilt is the market pricing weak growth rather than a shortage of tax, and it lands weeks before a Budget that still has to be funded. If October answers it with a bigger raid, the next repricing will be worse. Read the full story →

On the Diary

• Today, 9.30am BST — ONS births in England and Wales, 2025 final rates. Demographics are slow news until they are not: the birth rate is the front end of the dependency ratio that drives every long-run projection of what the state pension costs.
• Wednesday, 9.30am BST — ONS on musculoskeletal treatment waiting times and labour market outcomes. An unusual release linking NHS waits to whether people are working, and one of the few concrete reads on why hiring keeps missing people who want a job.

The Toolbox

One tool from the site each issue, chosen to fit what has just happened. Free, no sign-up, and it shows its workings.

Redundancy pay calculator

“Hiring is frozen and 4,000 people at JLR are about to find out what voluntary actually pays. This does the statutory arithmetic in about a minute.”

The Close

Two of today’s stories are the same one seen from opposite ends. A survey says businesses have not felt this good since 2024; a carmaker is cutting 4,000 jobs because money got dearer and its market got smaller — and only one of those turns up in a payslip. Confidence is free. A hire is a cost, and at a 5.294 per cent gilt everything that has to be funded is being repriced against it. Nine days to the Bank Rate decision, and the Budget after that.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB