Business confidence ticked up after Budget, Lloyds Bank says
UK business confidence climbed by the end of 2025, rising 10 points over the year. A sharp improvement came in December, driven partly by reactions to the Autumn Budget. While optimism grew, many firms remained cautious about hiring new staff.
The Autumn Budget, delivered on 26 November 2025, introduced tax increases on income, property, pensions, capital gains and stamp duties. Before the announcement, businesses had slowed investments, fearing higher costs. UK stocks edged up 0.4% during the speech, but reactions were mixed.
By December, confidence had rebounded strongly. Half of the year’s total growth in optimism occurred in that month alone. The construction sector led the way, jumping 22 points to reach 61%. Overall economic optimism hit a four-month high of 42% after the Budget. Yet despite the improved outlook, only 17% of firms planned to increase their workforce.
The Budget’s tax changes created short-term uncertainty, but confidence recovered by year-end. Construction saw the biggest gains, though hiring plans stayed limited. The final quarter of 2025 marked a shift in sentiment, even as caution remained.
