UK Business Confidence Hits Two-Year High After Budget – Are CEOs Ready to Spend?

A new survey of senior executives indicates that business confidence among leading companies in the United Kingdom has improved to its highest level in about two years following the Government's autumn budget announcement.

After a period of sustained negative sentiments in prior fiscal periods, corporate leaders are now showing signs of a tentative shift toward greater optimism and increased readiness to invest.

According to a quarterly Deloitte survey of 55 chief financial officers (CFOs), the net balance of business optimism has risen to minus 13 per cent in the fourth quarter of 2025, up from minus 24 per cent in the third quarter. This number is low enough to be compared with long-term averages, but it has nonetheless improved significantly, reaching its highest level since late 2023.

More Willing To Consider Investment, But Caution Remains

Deloitte's chief economist, Ian Stewart, explained to reporters that, despite remaining subdued, the sentiments in UK boardrooms were better than they were a year ago, with better prospects ahead after months of consumer confusion. Some early data on the S&P Global Purchasing Managers' Index (PMI) indicated that executive morale improved as well, suggesting this might not be limited to the most prominent companies.

An indicator of the change in attitude is the number of CFOs who made capital expenditure (capex) a high priority, which rose to a two-and-a-half-year high of 17 per cent. Although this is a low percentage, the gain suggests that executive teams are now better positioned to look beyond cost containment and pursue growth initiatives, despite lingering concerns about the overall economy.

Irrespective of these advances, CFOs remain cautious about geopolitical threats and productivity issues, areas that may soften decisions on recruitment and capital investments. According to Stewart, attitudes towards external uncertainty have declined but have not entirely disappeared.

The Budget's Limited Immediate Impact

The 2025 autumn budget, delivered by Chancellor Rachel Reeves, was a mixed bag for business confidence. At the time the Government announced a £26 billion package of tax increases, the majority were postponed and applied to less significant businesses than in the year before.

Economists admit that the postponement of tax increases in the short term gave companies breathing room and lowered short-term cost pressures. However, the general outlook remains wary: investment and hiring intentions are still not recovering with any force, and a significant number of CFOs report they will keep an eye on the progress of policies and overall global riskiness before being willing to make major outlays.

Contrasting Data: Confidence Not Uniform

Although there has been an increase in confidence among large corporates, other surveys paint a more positive and negative picture of UK business sentiment. As an example, a poll commissioned by the British Chambers of Commerce (BCC) conducted in late 2025 revealed that smaller firms and SMEs remain very low on confidence, with only a minority anticipating an increase in sales, and investment intentions remain low.

Equally, a snap poll of directors by the Institute of Directors showed that director confidence is almost at record-low levels despite the budget, with many leaders continuing to have reservations about investment and employment prospects. This implies that the mood in smaller or mid-sized companies is not concretised by the nurturing optimism seen in large corporations.

Economic Conditions Still Clouding Decisions

The UK economy still suffers the consequences of structural impacts on business decision-making. Broader statistics on investment levels reveal that the country lags behind most of its G7 counterparts, and domestic investment in capital projects has traditionally been weak.

Key economic indices, such as the FTSE 100, were at historic highs in early 2026, driven by financial market stability and defensive economic sectors. Still, company indices, such as wage growth and consumer spending, remain lopsided.

Are CEOs Ready To Spend?

So, are the UK CEOs really willing to spend? The current scenario suggests that the answer is a tentative yes to some. Among the biggest firms polled, it is showing the first signs of a revived interest in investment and that managers are moving towards focusing more on growth projects than on cost-cutting.

But throughout the broader business community, there is divided opinion, and smaller companies, especially, are not as convinced that the new budget will provide the business-friendly environment they have been longing for. Amid high geopolitical risks, productivity states, and the likelihood of further inflationary pressures, executives are generally seen as shy about making ambitious promises.

Finally, it remains unclear whether a significant increase will follow the recent surge in confidence in spending aimed at expansion, hiring, and capital projects in 2026, as it is just a good beginning. It seems that business leaders are not afraid of spending, yet only when broader economic conditions become clearer and more conducive to long-term development.