LONDON, Feb 2 (Reuters) – British entrepreneurs’ negativity about the economic outlook reduced at the start of 2026, rising to its highest since May and extending gains since finance minister Rachel Reeves’ November budget imposed fewer immediate tax rises than feared.
The Institute of Directors said that optimism about prospects for the UK economy rose to -48 in January from -66 in December, after touching an all-time low of -74 in September for the series, which started in 2016.
The upturn matches an improvement in other business surveys including preliminary purchasing managers’ index data for January. Final PMI figures are due this week.
Businesses’ confidence in their own operations also strengthened, rising to +14 from -4 as revenue and export expectations rose to their highest since September 2024 and July 2024 respectively.
Nonetheless, the businesses said they still intended to trim staff numbers and reduce investment, albeit to a lesser extent than before.
“Overall, there’s a sense that, while revenues and general conditions have stabilised, businesses are not yet ready to increase either their capital or labour costs materially,” IoD Chief Economist Anna Leach said.
The IoD survey was conducted from January 16-28 and was based on response from 578 businesses, most of which employed less than 50 staff.
(Reporting by David Milliken, editing by Andy Bruce)
Comments