NEWS

Economic confidence plummets

Economic confidence amongst the UK’s business leaders has dropped to an all-time low, according to data from the Institute of Directors (IoD).

The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, fell to -72 in July 2025 from -53 in June.

This exceeds the previous record low of -69 in April 2020 and marks the lowest reading of the Index since its introduction in July 2016.

Business leader confidence in their own organisations also fell to -9 in July 2025, from +3 in June. This is the second lowest reading of this indicator since its introduction in July 2016.

Anna Leach, Chief Economist at the IoD, said:

"UK business leaders have entered the summer with the lowest confidence levels we’ve seen since our records began in 2016.

Companies continue to battle cost increases – particularly arising from the national minimum wage and National Insurance changes – and many are frustrated that while the government has been quick to raise costs for business, it has been much slower to deliver improvements to the wider business environment.

Last year, damaging speculation around tax rises in the lead-up to the 2024 Budget caused many firms to pause investment and hiring decisions – contributing to six months of near-zero economic growth. We’re now living with the economic consequences of those tax hikes, even as uncertainty around future costs once again builds."

08/08/2025