Eyes Openers
  • World News
  • Business
  • Stocks
  • Politics
  • World News
  • Business
  • Stocks
  • Politics

Eyes Openers

Business

Confidence in short supply among bosses as tax hikes shake business outlook

by July 1, 2025
July 1, 2025
Confidence in short supply among bosses as tax hikes shake business outlook

Business leaders’ confidence in the UK economy has fallen sharply, as the full impact of government tax increases and rising cost pressures begins to take hold, according to the latest data from the Institute of Directors (IoD).

The Directors’ Economic Confidence Index — a key barometer of UK business sentiment — dropped to -53 in June 2025, down from -35 in May, marking a significant deterioration in optimism among company directors.

The survey found that investment intentions had suffered one of the steepest declines, with the net balance falling to -10 from 0 last month. Employers also cut back their hiring plans, with headcount expectations slipping from -1 to -10.

The IoD’s findings align with those of the British Chambers of Commerce (BCC), which recently reported that more than a third of its members were planning to reduce staffing levels in response to cost pressures. The data signals growing anxiety among business leaders over rising input costs, regulatory uncertainty, and tax burdens.

A major factor weighing on sentiment is the national insurance hike introduced in April by Chancellor Rachel Reeves, which saw employers’ contributions rise from 13.8% to 15%. This has added billions in labour costs for UK companies, particularly small and medium-sized businesses already navigating a volatile economic environment.

The increase in the national minimum wage has also intensified the pressure, particularly in labour-intensive sectors. Looking ahead, firms are bracing for further financial strain from the upcoming packaging tax and the government’s flagship employment rights overhaul — a wide-ranging reform package that ministers estimate will cost UK employers up to £5 billion in the coming years.

Anna Leach, chief economist at the IoD, said the recent slide in confidence reflected a tough balancing act for businesses. “Business leaders are finding economic conditions increasingly challenging, both as Autumn Budget tax measures take effect – particularly changes to national insurance, business and agricultural property relief – and from ever increasing global uncertainty,” she said.

While the government has recently launched a string of sector-focused strategies — including a long-term industrial strategy and new export trade plans — the IoD warned that rising costs were already undermining the UK’s attractiveness as a place to invest.

“The message coming through is that the tax increases unleashed on business have already undermined the industrial strategy’s ambition to make the UK the best country to invest anywhere in the world,” Leach added.

The IoD survey adds to a growing list of warnings from industry groups about the cumulative impact of policy changes on the UK’s business environment. As firms contend with tight margins, skills shortages, and geopolitical instability, many fear that confidence — and investment — may take time to recover.

Read more:
Confidence in short supply among bosses as tax hikes shake business outlook

previous post
Reeves to cut cash ISA allowance in push to revive UK capital markets
next post
Tech giants propose under-skin tracking and AI policing in radical justice overhaul

Related Posts

British fathers urged to join landmark ‘dad strike’...

June 9, 2025

A Fresh Contender in Online Trading – But...

June 30, 2025

Amazon commits £40bn to UK expansion with new...

June 24, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Popular Posts

    • A GOP operative accused a monastery of voter fraud. Nuns fought back.

      October 24, 2024
    • 2

      South Korea court begins review of Yoon impeachment

      December 16, 2024
    • 3

      Bill to rewrite Indigenous rights brings tens of thousands of protesters to New Zealand’s parliament

      November 19, 2024
    • 4

      Musk’s new ultimatum spurs fresh confusion among US government workers

      February 26, 2025
    • 5

      Brazil prosecutor general decides not to charge Bolsonaro for vaccine records fraud

      March 28, 2025

    Categories

    • Business (246)
    • Politics (20)
    • Stocks (62)
    • World News (20)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: EyesOpeners.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 EyesOpeners.com | All Rights Reserved