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There may yet be ‘unintended consequences’ from Chancellor Rachel Reeves’ Budget – that was the message from North West business leaders and analysts this evening.

Liverpool City Region’s political leadership has already shared its views on the Budget, with Metro Mayor Steve Rotheram saying he was pleased the region had an opportunity to secure its own specific funding agreement resembling pioneering arrangements established for Manchester and the Midlands.

Subrahmaniam Krishnan-Harihara, deputy director of research at Greater Manchester Chamber, said tax rises had been expected, so the increases in employer NIC and changes to capital gains tax (CGT) and inheritance tax (IHT) came as little surprise. But he warned that other Budget measures could yet have ‘unintended consequences’.

Regarding retail, he said: “The º£½ÇÊÓƵ high street has been struggling since the Covid-19 pandemic. The retail, hospitality and leisure relief provided a 75% reduction in business rates capped at £110,000. The Chancellor is maintaining a less generous version of the retail, hospitality and leisure relief of 40% again capped at £110,000. For those retail and hospitality businesses at the smaller end, this could present an increase in their business rates bill.

“Beyond rates, businesses in this sector face another eye watering increase in operating costs: the rise in National Living Wage and National Minimum Wage respectively by 6.7% and 16.3%, scheduled for next April, is likely to hit this sector amongst others. The combined impact of slightly higher business rates, much higher employment costs and increase in employers’ NIC risks presenting a perfect storm. Alongside these increases, apprentice wages are going up by 18% to £7.55 per hour.”

The Chamber also hailed news Greater Manchester will receive the integrated settlement from the Devolution Trailblazer starting April 2025. Mr Krishnan-Harihara noted that while the Transpennine route upgrades also received a mention, “much of this had been previously committed to under the Integrated Rail Plan for the North and Midlands three years ago”.

He added: “On investment, the pillar for the Chancellor’s growth agenda, announcements included some previously committed funding under the aegis of the National Wealth Fund. Overall, public sector net investment is expected to average 2.6% of GDP over the term of this Parliament. This amounts to an average £20 billion per annum. This is not substantial. With business taxation going up, the Chancellor may also struggle to drive up private investment.

“Perhaps, unsurprisingly, the medium-term growth forecasts have been revised down in the OBR’s assessment. The OBR expects the º£½ÇÊÓƵ economy to grow by 1.1% this year, 2% in 2025 and then slow down reaching 1.5% in 2028. These forecasts indicate that, by the end of this decade, the º£½ÇÊÓƵ economy will not be significantly larger than it is now, which clearly defies the claim of ‘growth, growth, growth’.