UK Business Confidence Plummets Amid Cost Crisis

UK business confidence experienced a sharp decline by the end of 2025, as indicated by a significant drop in business surveys. This downturn was primarily driven by escalating costs and pervasive uncertainty surrounding the economic outlook. Consequently, the jobs market showed signs of weakness, with both full-time and temporary employment figures decreasing in December.

This trend directly contradicts recent optimistic projections that suggested the country was on the verge of economic improvement. Businesses are expressing caution, with many pausing hiring and relying more on temporary staff. The head of BDO's growth, Scott Knight, emphasized the critical need for decisive government action, such as interest rate reductions and a clear economic roadmap, to foster growth and investment.

Furthermore, while some manufacturers see potential growth from the government's industrial strategy, a major concern is the threat of investment plans being cancelled or moved overseas due to substantial increases in employment and energy costs. This situation signals a potential tipping point, highlighting the urgent need for the government to deliver on its promises to create a favourable business environment.