Elias Hilmer, economist at the consultancy Capital Economics, said the drop in PMIs suggested that GDP could now be shrinking after barely growing in the third quarter. He added that the tax rises “seem to have restrained some private sector activity”, and that the prospect of new tariffs imposed by US president-elect Donald Trump “may have weighed on activity too”. However, he said increased government spending announced in the Budget — a factor not likely to be captured in the PMI survey — could contribute to growth.