IoD: business confidence ticks up in December, but hiring and investment remain under pressure

"The IoD's Directors' Economic Confidence Index, which tracks business leader optimism about the wider UK economy, rose to -66 in December, up from -73 in November, which had been measured immediately before the Budget."

""After months of policy uncertainty at the end of last year, it's a relief to see business leaders feeling a little more positive over the festive season," she said. "But confidence remains close to the record lows reached during the first Covid lockdown and after the last two Budgets.""

"Hiring freezes and cancelled capital spending were frequently cited in free-text responses, reflecting widespread cash preservation strategies across the private sector."

Business confidence measured by the IoD rose to -66 in December from -73 in November, while confidence in individual organisations remained effectively flat at -4 versus -5. Forward-looking indicators weakened: headcount expectations fell to -14 from -8 and investment intentions declined to -21 from -17. Employers cited hiring freezes and cancelled capital spending as cash preservation measures. Structural concerns around employment costs, taxation and regulation continue to weigh on business decision-making. Increased fiscal headroom and the decision not to assess fiscal rules at the spring OBR update could reduce short-term policy volatility but are unlikely to materially boost growth prospects.

Read at Business Matters