Business confidence has slumped this month as Sir Keir Starmer prepares to introduce tax rises and workplace reforms

There are concerns in the City that doommongering from Sir Keir and his chancellor Rachel Reeves risks becoming a self-fulfilling prophecy

Despite the weakening positivity, statisticians at Lloyds said firms were still bullish about their own trading prospects and keen to invest in jobs.

There are concerns in the City that doom and gloom messaging from Sir Keir and Rachel Reeves risks becoming a self-fulfilling prophecy.

The Chancellor claimed last month that Labour had been left with ‘the worst set of circumstances since the Second World War’.

And Sir Keir then said the inheritance was so bad that a ‘painful’ Budget would be needed in October, adding: ‘Things will get worse before they get better.’

The latest numbers suggest that many employers are ‘maintaining a degree of caution,’ said Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking.

‘While we still expect economic expansion, it may occur at a slower rate than the first half of 2024,’ he warned.

There were calls from within the City for more positive mood music around the economy this week after the UK was given the biggest growth upgrade in the G7.

The Organisation for ­Economic Cooperation and Development (OECD) said Britain’s gross domestic product (GDP) will grow by 1.1 per cent this year, up from a previously forecast 0.4 per cent.

During the election campaign, Ms Reeves insisted she would be the most ‘pro-growth’ Chancellor in history.

After claiming to have found a £22 billion ‘black hole’ in public finances, Ms Reeves has said she will not hike VAT, national insurance or income tax – sparking uncertainty over business taxes.

Ms Reeves has previously insisted she will be the most ‘pro-growth’ Chancellor in history and has committed to not hiking VAT, national insurance or income tax

Firms are hoping ministers will echo Tony Blair’s New Labour approach of close consultation with businesses

Separate data from KPMG also today reveals that 28pc of financial services chiefs are braced for the Budget to have a ‘significant impact’ on their businesses.

Almost a third believe the largest consequence will be sector-specific tax hikes.

‘It’s not completely unexpected to see a dip in confidence after a post-election high, but the speculation surrounding the Budget could be compounding this,” said Karim Haji, Global and UK head of financial services for KPMG.

‘This will drive greater need for clarity and certainty when it comes to financial services policy and plans to maintain the UK’s standing as a global financial centre.’

And firms are anxiously hoping to thrash out details of changes to employment rules and corporate taxes in the coming weeks.

They are hoping ministers will echo Tony Blair’s New Labour-era approach of heavily consulting with businesses.

In particular, some firms are on edge over plans for Labour’s ‘New Deal for Working People’, a union-friendly package of workers’ rights.

Anti-strike measures will be torn up, including removing minimum thresholds in ballots on industrial action. Staff will also have the right to demand ‘flexible working’, including from home and doing a four-day week.

Another cause for concern is the proposed new ‘right to switch off’ which would discourage employers from contacting staff outside their set working hours.

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Keir Starmer and top Labour figures including Sue Gray ‘used £4million Soho townhouse owned by donor Lord Alli for election strategy meetings’ amid row over use of the peer’s Covent Garden flat

Sir Keir Starmer has been accused of using a second plush London pad owned by  a multi-millionaire Labour donor.

The Prime Minister is already under fire for staying at an £18million penthouse in Covent Garden owned by Lord Alli earlier this year, using it to film party political material.

But it has now been revealed Sir Keir and other senior Labour figures including chief of staff Sue Gray used the former banker’s £4million townhouse in Soho for strategy meetings before the election.

It is the latest sign of a close link between Lord Alli, the PM’s largest personal donor, and the heart of the administration.

The Sunday Times said that the PM, Ms Gray and top players including Pat McFadden, the Chancellor of the Duchy of Lancaster, held regular meetings at the Georgian property.

The peer is also said to have allowed deputy PM Angela Rayner use his apartment in New York over the new year for a personal holiday.

The Prime Minister is already under fire for staying at an £18million penthouse in Covent Garden owned by Lord Alli earlier this year, using it to film party political material.

But it was now been revealed Sir Keir and other senior Labour figures including chief of staff Sue Gray used the former banker’s £4million townhouse in Soho for strategy meetings before the election.

It is the latest sign of a close link between Lord Alli, the PM’s largest personal donor, and the heart of the administration.

Mr McFadden said today that the rules on ministers accepting hospitality will be overhauled to ensure they are more transparent about what is being provided.

He said the rules will be changed to bring them in line with what shadow ministers and backbench MPs must declare, as he described the current requirements as a ‘Tory loophole’.

Under the current arrangements, introduced by David Cameron in 2015, details of hospitality received by ministers in their ministerial capacity are published by departments.

But the information is released quarterly and does not include the value of the hospitality. MPs’ and shadow ministers’ interests must be declared within 28 days, are published fortnightly and include the cost of the hospitality.

Mr McFadden told the BBC: ‘This was a Tory loophole, brought in so that you would have an event where the Tory minister, as it was under the last government, there, the Labour shadow opposite number would also be there, and the Tory minister would not have to declare.

‘That was the Tory rules, we don’t think that’s fair, so we will close that loophole so ministers and shadow ministers are treated the same going forward.’

It came as Rosie Duffield quit as a Labopur MP with a broadside at both ‘cruel and unnecessary’ policies such as the two-child benefit cap and the ongoing row about gifts and hospitality received by Sir Keir Starmer and other senior party figures.

The Canterbury MP resigned the Labour whip on Saturday.

Pat McFadden, the Chancellor of the Duchy of Lancaster, told the BBC’s Sunday With Laura Kuenssberg he was ‘disappointed’ but ‘not surprised’ by her decision.

He said: ‘When I read Rosie’s letter last night and listened to the interview there, I think you can see she has been disillusioned with the party leader, maybe the party more generally, for quite a long time.

‘I don’t think this is something that just developed in the last few months.’

Other Labour MPs have gone further, with one backbencher describing her as ‘poisonous’ and saying the leadership were ‘at least doing something right if they never talk to her’.

Relations between Ms Duffield and the Labour leadership have long been strained, particularly on the issue of transgender rights, and in her letter she criticised a lack of engagement with the Parliamentary Labour Party.

Located in Convent Garden the luxury pad (Pictured: The exterior) has been a longtime hangout for Labour grandes

Rosie Duffield’s full resignation letter to Sir Keir Starmer

She wrote: ‘As Prime Minister, your managerial and technocratic approach, and lack of basic politics and political instincts, have come crashing down on us as a party after we worked so hard, promised so much, and waited a long fourteen years to be mandated by the British public to be returned to power.

‘How dare you take our longed-for victory, the electorate’s sacred and precious trust, and throw it back in their individual faces and the faces of dedicated and hardworking Labour MPs?!

‘The sleaze, nepotism and apparent avarice are off the scale. I am so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party.’

Her letter continues: ‘I now have no confidence in your commitment to deliver on the ‘so-called’ change you promised during the General Election campaign and the changes we have been striving for as a political party over a decade.’

Ms Duffield also attacked Sir Keir’s record on antisemitism, claiming he left speaking up against former leader Jeremy Corbyn to ‘backbenchers like me’, while taking aim at the Prime Minister’s ‘heavy-handed management tactics’.

And in an attack on the wider party, she accused Labour of showing no interest ‘in my wonderful constituency’ during her seven years in the Commons.

She finished by saying that she hoped to return to Labour when it ‘resembles the party that I love’.

‘As someone who joined a trade union in my first job, at seventeen, Labour has always been my natural home.

‘Right now, I cannot look my constituents in the eye and tell them anything has changed. I hope to be able to return to the party in the future, when it again resembles the party I love, putting the needs of the many over the greed of the few.’