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last mo.

UK Business Confidence Ticks Higher as Budget Jitters Temper the Outlook

Directors see a tentative rebound at firm level with the CBI projecting weaker activity into November.

An index of optimism in the UK economy produced by the Institute of Directors rose to its highest level since the aftermath of Rachel Reeves’s first budget last October

Overview

  • Institute of Directors data show the economy-wide optimism index rose to -61 in August from -72 in July, the best since the aftermath of last October’s budget.
  • Business leaders’ confidence in their own organisations turned positive after a net -9 reading in July, though most still flag high employment taxes and costs.
  • The CBI’s latest Growth Indicator points to contraction over the next three months across services, distribution and manufacturing, citing higher employment costs, sluggish demand and uncertainty.
  • Business groups warn the Autumn Budget could reverse fragile gains, with economists estimating a fiscal gap of up to £40bn and reports suggesting Treasury has explored property and inheritance tax changes.
  • Signals remain mixed as ONS records 0.3% GDP growth in the three months to June and a BDO survey finds 74% of mid-sized firms have already exceeded their 2025 growth targets.