UK business confidence hits record low with rising costs weighing

 

UK business confidence hits record low with rising costs weighing

Business confidence in the UK dropped to a record low in September 2025, driven by surging employment and energy costs, according to a recent survey. Companies across sectors are reporting squeezed margins and worsening expectations for the coming months.

Inflation, particularly in food and energy, remains a stubborn challenge. Even though interest rates are not rising as sharply as before, the cumulative impact of previous rate hikes continues to hammer businesses with high borrowing costs and reduced consumer demand.

Many business leaders are calling for government action: calls include relief on energy bills, targeted subsidies for small and medium businesses, and tax reforms to stimulate investment. With the government's budget expected in November, there is hope that growth-oriented measures, rather than austerity, will take center stage.

The decline in sentiment is not evenly distributed. Energy-intensive businesses such as manufacturers, transport, and food processing are most affected. Regions with weaker growth or less access to capital are also showing sharper drops in confidence.

For economists, this slump in confidence could prefigure slower growth or even contraction in certain UK regions. The challenge for policy is to restore business expectations without stoking inflation or undermining fiscal discipline.

For professional inquiries and collaborations, you can connect with the economic writer Abdalla Hilal via LinkedIn: linkedin.com/in/abdalla-hilal-6356431a5.