Damning figures show that 80% of business leaders questioned are pessimistic about the UK’s prospects of turning around the economy. The poll, produced by the Institute of Directors, found that economic confidence amongst business leaders is at its lowest point since they began tracking in 2016, lower than in the aftermath of Brexit and at the height of the pandemic.

The responses of those asked gave an even more damning indictment of the government’s economic record since taking power, with a staggering 85% believing that policies implemented thus far will be unsuccessful in driving up economic growth. Anna Leach, Chief Economist at the Institute of Directors highlighted concerns over tariffs, rising costs and the prospect of tax rises in the Autumn as factors underpinning pessimism. Last month, it was revealed that the UK economy shrank by 0.1% in May.

Ms Leach urged the government to quash fears of imminent tax rises for businesses in the upcoming budget in order to ease fears and encourage increased investment.

She said: “UK business leaders have entered the summer with the lowest confidence levels we’ve seen since our records began in 2016.

“Companies continue to battle cost increases – particularly arising from the national minimum wage and NI changes – and many are frustrated that while the government has been quick to raise costs for business, it has been much slower to deliver improvements to the wider business environment.”

The poll showed that business optimism has fallen to -72 in July 2025, down from -53 in June and lower than the outset of the covid pandemic in April 2020 when it fell to -69.

Ms Leach added: “Last year, damaging speculation around tax rises in the lead-up to the 2024 Budget caused many firms to pause investment and hiring decisions – contributing to six months of near-zero economic growth.

“We’re now living with the economic consequences of those tax hikes, even as uncertainty around future costs once again builds.

“With ripple effects through the economy from tax changes and signs of consumer retrenchment, many firms report that they are struggling to plan amid a cacophony of risk.

“The government must urgently quash rumours of further tax rises for business this autumn, and accelerate planning reforms and de-regulation to restore confidence and drive growth.”