Business confidence takes a dip – what’s going on?

A recent survey by the Institute of Chartered Accountants in England and Wales (ICAEW) shows that business confidence in the UK has fallen to its lowest point in two years.

Rising tax bills, ongoing cost pressures, and concerns over future sales are making things tough for many businesses right now. ICAEW’s confidence index dropped to -3 in the first quarter of 2025 – down from 0.2 at the end of last year. That’s the weakest reading since late 2022.

Out of the 1,000 chartered accountants surveyed, more than half (56%) flagged tax hikes as a major issue – the highest figure since this survey began back in 2004. One of the key factors behind this? Chancellor Rachel Reeves’ recent £40 billion tax package, which includes a rise in employer National Insurance contributions from April.

On top of that, there are bigger global forces at play. President Trump’s renewed trade war in the US could slow down UK growth, and some forecasts even suggest GDP could flatline by 2026.

There was a bit of good news in February, with the economy growing by 0.5%. But overall, the mood is cautious – especially with reports of job losses at levels we haven’t seen since 2008 (although the official data is a bit more optimistic).

If your business is feeling the pinch – whether it’s around costs, cash flow, or just uncertainty – we’re always here to talk things through.

Get in touch – let’s make a plan that works for you.