IoD: Business confidence remains depressed ahead of Budget

The IoD Directors' Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, remained at historic low levels of -73 in October 2025, little changed from -74 in September, which was the lowest reading of the Index on record.

Business leader confidence in their own organisations crept up to ±0, from -7 in September.

All of the underlying indicators also saw a marginal improvement:

• Revenue expectations rose to +13 in October 2025, from ±0 in September.
• Headcount expectations rose to -2, from -13.
• Investment intentions rose to -13, from -20.
• Cost expectations fell to +81, from +89.
• Export expectations rose to +8, from +6.

Anna Leach, Chief Economist at the Institute of Directors, said:

“Business confidence remained at rock bottom in October, as businesses expect the worst from the Autumn Budget. However, there was a marginal improvement in other areas, albeit from low bases: headcount expectations for the year ahead rose a little, cost expectations declined to their weakest in over a year and investment intentions ticked up. This speaks to a fragile resilience in underlying economic conditions, borne out by other data such as retail sales.

“Business leaders are worn out from the past year's roller coaster of uncertainty and tax increases. We hear repeatedly of the effects: planning horizons shortened, hiring cancelled or outsourced, and discretionary spend on hold. Businesses need certainty over their costs – both tax and regulatory. We're calling for the burden of tax rises to be spread more evenly across the economy, a business tax roadmap with sufficient breadth and depth to deliver meaningful certainty, and a holistic approach to regulation which accepts reasonable compromises to the Employment Rights Bill.”

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

500 responses from across the UK, conducted between 17-30 October 2025. 14% ran large businesses (250+ people), 20% medium (50-249), 25% small (10-49 people), 30% micro (2-9 people) and 11% 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: