UK Business Confidence Takes Hit Amid Rising Costs and Uncertainty
The outlook for British businesses has taken a sharp turn for the worse, with confidence levels plummeting at the end of 2025 as costs continue to rise and economic uncertainty looms large. According to key business surveys, hiring also slowed down in December, with full-time and temporary job appointments falling.
Industry experts attribute this trend to growing concerns over rising cost pressures and higher global economic uncertainty. Many firms are taking a cautious approach, pausing hiring and instead opting for temporary staff to manage their finances. KPMG group chief executive Jon Holt warned that this restraint is likely to remain in the near term.
The situation is not just affecting small businesses but also large corporations. UK business confidence has weakened sharply at the end of 2025, with the BDO's optimism index hitting its lowest level in nearly five years. The accountancy firm attributes this decline to rising business costs and falling turnover expectations. To reverse this trend, decisive action such as further interest rate reductions or a clear roadmap for growth is necessary.
However, there are still some glimmers of hope. Keir Starmer's government kicked off 2026 with promises that the economy will soon start showing signs of improvement due to cuts in energy bills and interest rates. Additionally, many British manufacturers believe their growth prospects will improve this year thanks to the government's industrial strategy.
But despite these positive predictions, industry experts are sounding a warning bell. The significant increases in business costs are threatening to reach "a tipping point", where investment plans may be cancelled or shifted overseas. Make UK chief executive Stephen Phipson said manufacturers can only thrive "in the most favourable business environment".
The outlook for British businesses has taken a sharp turn for the worse, with confidence levels plummeting at the end of 2025 as costs continue to rise and economic uncertainty looms large. According to key business surveys, hiring also slowed down in December, with full-time and temporary job appointments falling.
Industry experts attribute this trend to growing concerns over rising cost pressures and higher global economic uncertainty. Many firms are taking a cautious approach, pausing hiring and instead opting for temporary staff to manage their finances. KPMG group chief executive Jon Holt warned that this restraint is likely to remain in the near term.
The situation is not just affecting small businesses but also large corporations. UK business confidence has weakened sharply at the end of 2025, with the BDO's optimism index hitting its lowest level in nearly five years. The accountancy firm attributes this decline to rising business costs and falling turnover expectations. To reverse this trend, decisive action such as further interest rate reductions or a clear roadmap for growth is necessary.
However, there are still some glimmers of hope. Keir Starmer's government kicked off 2026 with promises that the economy will soon start showing signs of improvement due to cuts in energy bills and interest rates. Additionally, many British manufacturers believe their growth prospects will improve this year thanks to the government's industrial strategy.
But despite these positive predictions, industry experts are sounding a warning bell. The significant increases in business costs are threatening to reach "a tipping point", where investment plans may be cancelled or shifted overseas. Make UK chief executive Stephen Phipson said manufacturers can only thrive "in the most favourable business environment".
honestly, who wouldn't want to hire new staff when you're worried your business is gonna get sunk by rising costs? 
i mean, it's not like they're gonna save up for a rainy day or anything... 
anyway, seems like the UK government thinks cutting energy bills and interest rates will be enough to get things moving again. 
like, it's all good and well if they can actually deliver on those promises... 
but until then, businesses are just gonna have to keep waiting around for a "favourable business environment" 
rising costs and economic uncertainty are taking a huge toll on their confidence levels 
dont get me wrong theres some hope with the government's plans to cut energy bills and interest rates, but its still too early to tell if theyll actually work 
manufacturers are counting on this industrial strategy to boost their growth prospects, but we need to see some decisive action ASAP 
. and now this whole interest rate reduction thingy... feels like they're just patching up the same old problems without really fixing them 
. It's tough for small businesses to keep up with all these rising costs. Some of them might have to get creative with their finances or take a hit on their profits. But, you know, it's not all doom and gloom 
. I've seen some amazing entrepreneurs come out of nowhere and build successful businesses from scratch. It just takes the right idea, hard work, and a bit of luck 
. Maybe the government's plans to cut energy bills and interest rates will give businesses a boost? Fingers crossed that we'll see some positive change soon!
But I gotta say, I see some rays of sunshine here 
. Like, those promises from Keir Starmer's government to cut energy bills and interest rates are a total game-changer! If they can make good on that, it could be a huge confidence booster for businesses. And manufacturers being optimistic about their growth prospects is super cool 
. I mean, we've been through tough times before, right? We just gotta stay positive and focus on the future 
. Let's not forget those "glimmers of hope" 
...
they're literally taking a hit from rising costs & economic uncertainty 
anyone else think we might be entering another recession? 
It's not just small businesses that are feeling the pinch, either - large corporations are also getting in on the pain.
️. I'm also hoping that Keir Starmer's government can deliver on their promises and bring some much-needed stability to the economy.
. That would be a disaster for UK manufacturers, who could really use some support right now. So yeah, let's keep our fingers crossed that things can turn around soon! 
... what they really need is for the government to give 'em some confidence 
. And if not, I reckon we'll see even more closures and job losses in the near future 
...
I don't know how long our businesses can keep going like this... all these rising costs and uncertainty are taking a toll on confidence levels. It's not just small businesses, even big ones are feeling the pinch. The UK government better come up with some real solutions to boost economic growth soon or we'll be in trouble 
. I'm glad they're talking about cutting energy bills and interest rates, but it's not enough if investment plans get cancelled because of costs. Manufacturers need a clear roadmap for growth 
. But seriously, it's not just small biz that's affected – big corporations are feeling the pinch too 
. Fingers crossed for Keir Starmer tho 
, their promises seem legit this time around 
!
.
. Fingers crossed that the Starmer government can deliver on their promises and get the economy back on track 
i think the key here is to be proactive, not reactive 
. instead of waiting for things to get better, let's start working on solutions now 
. but honestly, it's all about being honest with ourselves - are we just afraid to take risks, or are we really uncertain about the future? 
it's not just small businesses that are struggling, big corporations too... 
.