IoD press release Business confidence loses half the gains made since November
The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, fell back to -53 in June 2025, having risen to -35 in May.
Business leader confidence in their own organisations also fell to +3, having reached +15 in May.
In terms of the underlying indicators:
- Investment intentions fell to -10 in June 2025, from ±0 in May.
- Revenue expectations fell to +8, from +18.
- Export expectations fell to +4, from +9.
- Headcount expectations fell to -10, from -1.
- Cost expectations reduced to +81, from +83.
- Wage expectations reduced to +40, from +45.
Anna Leach, Chief Economist at the Institute of Directors, said:
“It is disappointing to see the confidence of UK business leaders in the economy dropping back again this month. The IoD’s confidence measure has now lost about half the gains made since November. Headcount and investment intentions also deteriorated in June, with headcount expectations weakening most.
“Business leaders are finding economic conditions increasingly challenging, both as Autumn Budget tax measures take effect – particularly changes to national insurance, business and agricultural property relief – and from ever increasing global uncertainty. While the recently launched strategies from the government tick many boxes, the message coming through is that the tax increases unleashed on business have already undermined the industrial strategy’s ambition “to make the UK the best country to invest anywhere in the world”.
“The reality is that the government has been much more radical in taxing business than it has been in removing blockers to growth. We need to see faster progress and greater ambition on de-regulation – particularly planning reform – and a reconsideration of the tax landscape for business if we’re to change the UK’s economic fortunes.”
The IoD Directors’ Economic Confidence Index measures the net % positive answers from members of the Institute of Directors to the question ‘How optimistic are you about the wider UK economy over the next 12 months?’ on a five-point scale from ‘very optimistic’ to ‘very pessimistic’.
Full Results
449 responses from across the UK, conducted between 13-30 June 2025. 12% ran large businesses (250+ people), 18% medium (50-249), 24% small (10-49 people), 32% micro (2-9 people) and 14% sole trader and self-employed business entities (0-1 people).
How optimistic are you about both the wider UK economy and also your organisation over the next 12 months?
Comparing the next 12 months with the last 12 months, what do you believe the outlook for your organisation will be in terms of:
