Business leaders' confidence in the UK economy has sharply declined, with the Directors' Economic Confidence Index falling to -53 in June 2025 from -35 in May. Investment intentions have seen a steep decline, with net balance dropping to -10. Employers are cutting hiring plans, leading to a decrease in headcount expectations. A national insurance hike has added considerable costs for firms. Furthermore, upcoming financial strains from various tax changes are anticipated to exacerbate the challenges faced by businesses.
"The Directors' Economic Confidence Index, a key barometer of UK business sentiment, dropped to -53 in June 2025, down from -35 in May, marking a significant deterioration in optimism among company directors."
"A major factor weighing on sentiment is the national insurance hike introduced in April by Chancellor Rachel Reeves, which saw employers' contributions rise from 13.8% to 15%, adding billions in labour costs for UK companies."
"Employers also cut back their hiring plans, with headcount expectations slipping from -1 to -10, signaling growing anxiety among business leaders over rising input costs and tax burdens."
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