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

Headcount expectations recovered for the second month running from -4 to +3, the first positive reading since September 2024.

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

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“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.

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“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.”

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