Key Points
- British business optimism improved in the fourth quarter of 2025, but it remains below average.
- The improvement is partly due to a less harsh-than-expected budget from the finance minister.
- The number of executives prioritizing investment has risen to a two-and-a-half-year high.
- The overall mood is still “subdued,” with concerns about geopolitics and productivity.
British business leaders are feeling a little more optimistic as the year comes to a close, but the overall mood is still far from cheerful. A new survey from Deloitte shows that business optimism improved in the fourth quarter of 2025, but it remains below the long-term average.
The slight increase in confidence appears to be a response to the latest budget from Finance Minister Rachel Reeves. In November, she announced a series of tax hikes, but she delayed most of them and made sure they didn’t hit businesses as hard as her previous budget did. This seems to have given company executives a bit of breathing room.
The survey, which polled 55 chief financial officers from major British companies, found that while the mood is still “subdued,” it’s “more positive than a year ago.”
The number of executives who said that increasing investment is a top priority rose to its highest level in over two years. This is a positive sign, as it suggests that companies may be willing to resume spending, which would help the economy grow.
Other recent surveys have painted a similar picture of a tentative recovery. The S&P Global Purchasing Managers’ Index also showed a slight improvement in morale in British boardrooms. While executives remain concerned about geopolitics and productivity, their risk appetite has increased from its autumn lows.
It’s still too early to say if this is the start of a real turnaround for the British economy. The manufacturing sector has been struggling for years, and while there was a small upturn at the end of 2025, it’s still on shaky ground. For now, it seems British businesses are cautiously hoping for a better 2026.
