"Business confidence in the UK has climbed to its highest level since Rachel Reeves' first budget last October, though leaders warn the fragile recovery could be undermined by further tax hikes in the autumn. The Institute of Directors' (IoD) index of optimism rose to -61 in August, up from -72 in July, recovering from a record low but still signalling pessimism overall."
"Business leader confidence has picked up slightly from July's record low, but only to levels seen after the 2024 budget and during the early pandemic,"
"Hiring and investment expectations continue to swing back and forth as April's tax rises ripple through the economy, while cost pressures remain stubbornly high."
The IoD optimism index rose to -61 in August from -72 in July, indicating a modest recovery from a record low while overall sentiment remains pessimistic. Directors report reduced concern about investment and headcount and expect export growth despite US tariff disruption. Hiring and investment intentions have edged upward, though many firms say a £25 billion national insurance rise weakened the labour market. A BDO survey found 74% of mid-sized businesses exceeded 2025 growth targets driven by stronger consumer demand and AI productivity gains. Nearly half of IoD members report damaged finances from higher taxes and the CBI expects activity to contract next quarter.
Read at Business Matters
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