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."
READ MORE
08/08/2025
View all >
09/07/2026
Tax gap up to more than £59 billion
The tax gap rose to a record high of £59.2 billion in cash terms for 2024/25, according to the latest data from HMRC.
Gen Zs wish they had learnt tax basics
Four in ten of Generation Z say they wish they had learnt the basics about tax when they were younger, according to data from HMRC.
Brexit burden must be cut, says BCC
The UK government must set out a clear plan to ease the burdens that Brexit has placed on business, says the British Chambers of Commerce (BCC).
Sign up to keep in touch to receive our latest news and industry updates.
* *
Yes, I would like to receive email updates providing me with the latest finance news, advice guides and details of future events.