Business confidence falls to new record low

02 Oct 2025

Business confidence fell to its lowest level on record in September, driven by concerns over soaring costs, according to a survey conducted by the Institute of Directors (IoD).

Business leader confidence in their own organisations also fell to -7 in September 2025, from +1 in August. This matches the level of -7 recorded in November 2024.

The biggest factors driving businesses' outlook for costs over the year ahead are labour costs, followed by supply chain inflation and energy costs.

Anna Leach, Chief Economist at the IoD, said: 'Business leaders are calling for a reduction in government-generated costs – whether through a lower tax burden or lighter regulation.

'But crucially they are seeking a more coherent and credible plan for growth. Some positive steps are in place – including additional public sector investment and long-term policy plans. But persistent fears that taxes on business and assets will rise are stifling confidence, holding back investment, and threatening growth and living standards.

'The Chancellor's conference speech rightly reiterated the role that fiscal credibility has in providing the platform for growth. But we urgently need a genuinely growth-focussed Budget that has business at its heart, that delivers genuine policy coherence and stability and reduces regulatory and tax burdens on business.'