UK Business Optimism Remains Weak

2026-01-21 11:46 By Agna Gabriel 1 min. read

Business sentiment in the UK deteriorated in January, with manufacturers optimism about both the business situation (-19%) and export prospects (-12%) declining.

However, sentiment is now the least negative since July 2024.

Confidence is being undermined by falling output and a sharp decline in new orders, as customers delay decisions and limit spending, leaving order books thin.

This lack of demand visibility is the main constraint on confidence and is holding back investment plans.

Although cost growth has slowed, high wages, energy prices and taxes continue to squeeze margins.

With capacity utilisation and employment still falling, confidence remains subdued, highlighting the need for lower business costs and clearer policy to support recovery.



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UK Business Morale Deteriorates Most Since Covid Crisis
The CBI’s quarterly measure of UK manufacturing optimism plunged to -65 in April from -19 in January, marking the weakest sentiment since 2020 as the Iran war fuels uncertainty. The survey highlighted growing pressure on supply chains and rising costs, with firms turning increasingly pessimistic about the outlook. Order books deteriorated further, with the balance falling to -38 from -27 in March, well below the long-run average. At the same time, inflation expectations surged sharply, with the price gauge jumping to +32 from +12, the largest monthly increase on record. Investment intentions also weakened significantly, with plans for spending on buildings, machinery, and training dropping to their lowest levels since April 2020.
2026-04-23
UK Business Optimism Remains Weak
Business sentiment in the UK deteriorated in January, with manufacturers optimism about both the business situation (-19%) and export prospects (-12%) declining. However, sentiment is now the least negative since July 2024. Confidence is being undermined by falling output and a sharp decline in new orders, as customers delay decisions and limit spending, leaving order books thin. This lack of demand visibility is the main constraint on confidence and is holding back investment plans. Although cost growth has slowed, high wages, energy prices and taxes continue to squeeze margins. With capacity utilisation and employment still falling, confidence remains subdued, highlighting the need for lower business costs and clearer policy to support recovery.
2026-01-21