UK business confidence has plummeted, hitting its lowest level in over two years, per the ICAEW’s quarterly survey. The Business Confidence Index fell to -3 in Q1 2025, attributed to escalating operational costs, slowing sales, and heightened global trade tensions, notably from Trump’s tariff policies. Tax increases, especially the rise in employer National Insurance contributions, significantly worry businesses, marking the highest level of tax anxiety since 2004. Analysts warn that these factors could push UK GDP growth towards zero, intensifying economic uncertainty.
The Business Confidence Index dropped to -3 for the first quarter of 2025, the weakest reading since late 2022, reflecting rising operational costs and slow sales.
56 percent of chartered accountants cited rising taxes as their top concern, the highest level of tax-related anxiety recorded since 2004, due to Chancellor Reeves's tax hikes.
Business sentiment has been pushed into ominous territory this year due to escalating trade tensions, particularly with the impact of the US tariffs on UK exports.
Analysts warn that ongoing trade disruptions, including Trump's tariffs, could drag UK GDP growth close to zero, with significant implications for the economy.
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