UK enterprise confidence has fallen to its lowest stage in over two years, in response to new information from the Institute of Chartered Accountants in England and Wales (ICAEW), as rising tax pressures and escalating world commerce tensions take their toll on company sentiment.
In its newest quarterly survey of 1,000 chartered accountants, the ICAEW reported that its Enterprise Confidence Index dropped to -3 for the primary quarter of 2025—down from 0.2 within the remaining quarter of final 12 months, and the weakest studying since late 2022. The findings mirror mounting anxiousness over working prices, slowing gross sales, and the financial fallout from President Donald Trump’s tariff-led commerce warfare.
“These figures suggest that this year has so far been a pretty harrowing one for the UK economy,” stated Suren Thiru, Economics Director on the ICAEW. “Accelerating anxiety over future sales performance, April’s eye-watering tax hike and US tariffs helped push business sentiment into ominous territory.”
The survey revealed a major shift in enterprise priorities, with 56 per cent of respondents citing rising taxes—notably the rise in employer Nationwide Insurance coverage contributions (NICs) launched by Chancellor Rachel Reeves—as a rising concern. That marks the very best stage of tax-related anxiousness recorded because the survey started in 2004.
Reeves’s £40 billion tax-raising Autumn Finances, which got here into pressure on 6 April, has fuelled fears that elevated prices will curb funding, hiring and shopper confidence.
Commerce tensions and coverage uncertainty weigh on outlook
Companies are additionally rising more and more uneasy concerning the wider world context. Trump’s newest spherical of tariffs, launched in March, have raised issues that merchandise destined for the US could also be redirected to markets just like the UK, undercutting home suppliers and denting exports. Analysts warn that such commerce disruptions might drag UK GDP progress near zero within the coming 12 months, in response to the Nationwide Institute of Financial and Social Analysis (NIESR).
Though the UK economic system shocked on the upside in February with 0.5 per cent month-to-month progress, official information reveals resilience in shopper and enterprise spending regardless of the grim outlook from forward-looking surveys. Nonetheless, employment indicators are flashing purple, with some surveys suggesting job losses on the quickest price because the 2008 monetary disaster—regardless that official labour market information has thus far offered a extra steady image. The following set of jobs information is due on Tuesday, adopted by inflation figures on Wednesday.
Companies are additionally scaling again expectations for home progress, with gross sales forecasts now at their weakest since Q3 2022. This slowing momentum, mixed with persistent price pressures, is predicted to accentuate requires the Financial institution of England to behave. Many available in the market now anticipate a price reduce on 8 Might, regardless of inflation nonetheless hovering above the Financial institution’s 2 per cent goal.
“The mood music on the economy is turning increasingly sour,” added Thiru. “With forward-looking indicators of sales and employment activity weakening, things may get worse before they get better.”
As companies proceed to grapple with rising overheads and exterior shocks, confidence will probably stay fragile—putting even higher significance on coverage readability, fiscal assist and commerce stability within the months forward.
