How are the private and public sectors in the UK responding differently to rising tax burdens?

While the private sector struggles with increasing tax burdens, the public sector is experiencing a more optimistic outlook, benefiting from recent pay rises funded by tax increases. Small businesses are particularly vulnerable, with surveys showing a steep decline in confidence – more than a quarter expect to downsize in the first quarter of 2025, and over 67% cite the tax burden as a critical barrier to growth. This dichotomy highlights the uneven impact of fiscal policies, where public sector employees gain from increased government spending while private businesses face mounting challenges that threaten their sustainability and growth potential.