Business confidence moves to its highest level since before the Budget – IoD

The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, rose slightly for the second month in a row, from -58 in March 2025 to –51 in April – the highest since September 2024 (-38).

Business leader confidence in their own organisations also improved from +5 in March to +13 in April.

Most of the underlying indicators also saw a modest improvement in April.

For instance, headcount expectations recovered for the second month running from -4 to +3, the first positive reading since September 2024 (+6), although still significantly down on the year (+20 in April 2024).

Investment intentions rose for a second consecutive month from -8 to -5, but likewise remained sharply down on the year (+21 in April 2024).

Cost expectations declined for the second month in a row from +87 to +83, but remained up on the year (+76 in April 2024), while export expectations rose from +5 to +8 (+14 in April 2024).

In addition, wage expectations fell from +49 to +43 (+57 in April 2024) and revenue expectations fell from +15 to +14 (+40 in April 2024).

Anna Leach, chief economist at the Institute of Directors, said: “The overall mood amongst business leaders improved in April as the worst of the tariffs from the States were paused for 90 days.

“The IoD’s headline confidence measure moved to its highest level since before the Budget, while investment, headcount and cost expectations all improved for a second month running.

“The most prominent areas of concern were uncertainty arising from US tariff policy, which is both slowing-down and scaling-down contracts, alongside the sharp rise in costs following last year’s Budget.”

Leach added: “There’s a strong sense of frustration amongst business leaders that the Government has been quick to raise their costs, but slow to deliver policies which will support them to grow their businesses.

“The Government is right to focus on public sector efficiency, but this needs to improve the pace of growth-friendly policy delivery as well as deliver value for money.

“Businesses would welcome quicker progress on the de-regulatory drive as well as actions to address other barriers to growth – including energy and employment costs – which would free up resource to invest and grow.”