Every two months, we survey 600 business leaders across the country to understand their expectations and priorities for the future. We use this data to track changing market sentiment over time, and explore topical issues and challenges facing businesses in the UK.

UK economic outlook

This round finds that confidence in the market has remained steady since April above the rolling average, showing that the mid-market is shaken, but not deterred. 

Net 81% of respondents are optimistic about the outlook of the UK economy - a 1 percentage point (pp) increase compared to April but +11pp above average net confidence since 2021. Business pessimism about the UK economy remains at low levels. 

Rolling averages for graph:

  • Optimistic: 81%
  • Pessimistic: 8% 

Optimism on the outlook of the UK economy over next six months

Key moments in time that impacted market optimism

  • July 2021: Official end to legal limits on social contact in England
  • February 2022: Russian invasion of Ukraine
  • August 2022: Inflation rate in the UK hits double digits for first time in 40 years
  • April 2023: Government Energy Bill Relief Scheme for businesses ends
  • July 2024: Labour wins UK General Election

Revenue growth

Revenue growth expectations are down 1pp compared to April but remain above the rolling average by +8pp. Net 8% of respondents are now pessimistic about ​their revenue growth, no change since February this year.

Rolling averages for graph: 

  • Optimistic: 79%
  • Pessimistic: 8% 

Optimism on business revenue growth over next six months

Key moments in time that impacted market optimism

  • July 2021: Official end to legal limits on social contact in England
  • February 2022: Russian invasion of Ukraine
  • August 2022: Inflation rate in the UK hits double digits for first time in 40 years
  • April 2023: Government Energy Bill Relief Scheme for businesses ends
  • July 2024: Labour wins UK General Election

Funding position

Confidence in funding position remains above the rolling average by 9pp. The percentage of businesses pessimistic about their position stayed low, with no significant change from February.

Rolling averages for graph:

  • Optimistic: 80%
  • Pessimistic: 7% 

Optimism on business funding position over next six months

Key moments in time that impacted market optimism

  • July 2021: Official end to legal limits on social contact in England
  • February 2022: Russian invasion of Ukraine
  • August 2022: Inflation rate in the UK hits double digits for first time in 40 years
  • April 2023: Government Energy Bill Relief Scheme for businesses ends
  • July 2024: Labour wins UK General Election

Profit expectations

Proft expectations grew by 7pp compared to April whilst those expecting profits to decrease fell 9pp in the same period. Profit expectations still remain above average levels since October 2023.

Profit growth expectations over next six months

Tom Middleton, Managing Director for Economic Consulting at Grant Thornton UK, commented:  

“If there’s one thing businesses have learned over the past few years, it’s the need to treat uncertainty as an absolute certainty. Despite the volume of change and unknowns – from geopolitical shocks in markets abroad to policy tinkering at home – UK businesses are adopting strategies to remain resilient, and this is reflected through their ongoing positivity, whatever the headwinds. 

“That’s not to say that everything is smooth sailing. Businesses continue to grapple with high operating and people costs, largely resulting from the National Insurance and National Minimum Wage increases which came into force in April. Though businesses are broadly positive about government policy and strategy, there is a clear expectation that further pressure will come in the form of tax increases later this year.   

“Continually increasing costs are one of the main contributing factors to the dampening of the labour market, which the Bank of England recently expressed concerns about.  However, intention for recruitment over the next six months remains well above average levels, suggesting businesses are managing costs and preparing for future growth.  Businesses have become adept at pivoting to manage cost pressures which is demonstrated by two thirds of respondents saying they have changed their recruitment and remuneration strategies, increased prices or reduced capital investment in an effort to protect margins. 

“Adaptable strategies and nimble mindsets adopted as survival mechanisms throughout the pandemic are now embedded as best practices for many successful businesses and this has helped position them to thrive in the modern economy, despite the barrage of curveballs still coming their way.  There is however, a difference between surviving and thriving in these challenging times and so faster progress on reducing red tape and reforming the tax landscape will be vital for future.”

Business investment expectations

Reflecting confidence levels, the June round recorded steady investment expectations, maintaining average levels. Despite reported weakening in the labour market, recruitment expectations remain strong with 43% expecting to increase investment in hiring over the next six months. This is 8pp above the rolling average.

The biggest changes to investment expectations are:

  • technology (+6pp)
  • R&D (+6pp)
  • skills development (-5pp).

tracking-pixels