The UK government has unveiled a package of measures intended to cut business costs by almost £800 million a year, making it the most consequential business announcement reported on 31 October as Chancellor John Healey prepares to deliver his first Budget next week.

The measures are designed to reduce paperwork, simplify compliance and lower import costs for companies, particularly smaller businesses facing weak demand, elevated borrowing costs and persistent inflationary pressures.

Relief ahead of the Budget

Prime Minister Andy Burnham said the package would give businesses “breathing space to grow”. The government said simpler compliance guidance would save companies about £290 million annually, while extending the suspension of import tariffs on 250 business-use products would provide a further £155 million of relief.

Additional savings include an estimated £105 million from reducing duplicated reporting requirements for asset managers and £116 million from removing costs associated with residential property transactions.

The announcement comes days before Healey’s Budget, which is expected to balance support for households and businesses against tight public finances. The government has indicated that new initiatives will need to be funded through tax increases, spending reductions or existing fiscal headroom rather than additional borrowing.

Businesses seek more than administrative relief

For companies, the measures offer targeted support but do not remove wider pressures. UK inflation reached 3.1% in the third quarter of 2026, one percentage point above the forecast published in March, according to the government’s latest economic and fiscal outlook.

Higher interest rates and subdued housing activity are also weighing on demand. Nationwide data showed annual UK house-price growth slowing to 0.5% in October, the weakest pace since January 2024, with the average property price at £273,566.

The combination of slower growth and higher costs has increased pressure on ministers to deliver practical help without undermining confidence in the public finances.

Markets respond to fiscal restraint

Investors have responded positively to signs of fiscal discipline surrounding the Budget. The 10-year gilt yield fell to 5.25% on Thursday and was on course for its largest monthly decline since May, signalling improved sentiment towards UK government debt.

The FTSE 100 also recorded its first monthly gain in three months, although the index’s performance was shaped by company-specific results as well as expectations for government policy. AstraZeneca shares rose sharply after the pharmaceutical group reported stronger third-quarter profit, while NatWest fell following a decline in quarterly attributable earnings.

Businesses await the next test

The government’s package is likely to be welcomed by firms that face complex reporting requirements or rely on imported inputs. However, its broader economic impact will depend on whether the Budget provides durable certainty on taxation, energy costs and investment.

With public finances under strain and inflation still above target, ministers face a narrow path between offering meaningful support and preserving the market confidence that has recently helped lower gilt yields. The Budget will show whether the government can turn today’s targeted relief into a wider business-growth strategy.