According to new figures by Chartered Accountants in England and Wales, the trust of Britain's trade has fallen to its lowest level in two years, as increasing tax pressure and growing global trade takes their toll on corporate spirit by increasing stress.
In its latest quarterly survey by 1,000 Chartered Accountants, ICAEww reported that its business confidence index fell to -3 for the first quarter of 2025 -from 0.2 in the last quarter of the last year, and the weakest reading from the end of 2022.
“These figures suggest that this year has been a very annoying for the UK economy so far,” said Saren Thiru, director of ICAEWE Economics. “Rose to the performance of future sales performance, the tax growth from the eyes of April and the US tariff helped push the trade spirit into the inauspicious region.”
The survey led to a significant change in commercial priorities, in which 56 percent of the respondents cited growing taxes – especially an increase in the Employer National Insurance Contribution (NICS) introduced by Chancellor Rachel Reves – as a growing concern. It marks the highest level of tax-related concern recorded since the survey began in 2004.
Reeves' budget -raising autumn budget, which came into force on 6 April, has fulfilled the apprehensions that will lead to investment, hiring and curb consumer confidence by increasing costs.
Business stress and policy uncertainty weight on Outlook
Businesses about comprehensive global references are also growing rapidly. The latest rounds of Trump introduced in March, expressing concern that the products fixed for the US can be redirected in markets such as the UK, can be reduced to domestic suppliers and exports to export. Analysts have warned that according to the National Institute of Economic and Social Research (NIESR), such trade disruptions may draw UK GDP development close to zero in the coming year.
Although the UK economy surprised upside down with 0.5 percent monthly development in February, the official data shows flexibility in consumer and business expenses despite a foggy approach to forwarding surveys. However, employment indicators are red shining, with some surveys, with the 2008 financial crisis suggested job loss at the fastest rate – even though the official labor market figures have presented a more stable picture so far. The next set of jobs data is scheduled on Tuesday, followed by inflation figures on Wednesday.
Businesses are also surpassing expectations for domestic development, with sales forecasts now their weakest since Q3 2022. It is expected to speed up the call to work for the bank of England jointly with frequent cost pressures. Many in the market now estimate the rate cut on May 8, yet inflation is still above the 2 percent target of the bank.
“The mood music on the economy is growing rapidly,” Thiru said. “Things may deteriorate before it is better, with the indicators that forward sales and employment activity.”
Since businesses struggle with growing overheads and external shocks, confidence will probably be delicate – in the next months, policy clarity, fiscal support and business gives even more importance on stability.
Jamie young
Jamie is a senior reporter in Business Matters, who is bringing more than a decade experience in UK SME business reporting. Jamie holds a degree in business administration and regularly participates in industry conferences and workshops. When not reporting the latest commercial developments, Jamie has emotional about advising journalists and entrepreneurs to motivate the next generation business leaders.