The Institute of Directors’ Economic Confidence Index, measuring business optimism, found that 37.5% of leaders were ‘quite pessimistic’ and 17.1% ‘very pessimistic’ about the wider economy’s prospects in the next 12 months. Just 0.8% were ‘very optimistic’ and 16.2% ‘quite optimistic’.
Business investment intentions were at their lowest level since September 2020 and experienced their sharpest drop since the onset of the Covid-19 pandemic, with 20.9% seeing their organisations’ outlook as ‘somewhat lower’ and 10.9% ‘much lower.’
The findings came in the run-up to chancellor Rachel Reeves’ first Budget, to be announced at the end of October.
The Institute of Directors’ chief economist Anna Leach said leaders had concerns about tax increases, the cost of workers’ rights, international competitiveness, broader price pressures and the outlook for economic growth.
Upcoming policy announcements could “foster a more supportive environment for growth and investment, and underpin an improvement in business confidence”, she noted.
“In the next few weeks we expect to see more detail on industrial strategy, the business tax roadmap and a likely update to the fiscal rules to better recognise the contribution of public sector investment to the UK’s asset base,” she said, adding that these could “create a more steady environment”.