Confidence among UK accountants still short of a full recovery
Confidence among UK accountants still short of a full recovery
UK accountants report tentative signs of recovery following two consecutive quarters of improved sentiment, but business confidence remains well below long-term norms, according to new data from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).
Findings from the Q2 2025 Global Economic Conditions Survey (GECS) point to a modest uplift in business confidence among British SMEs, building on gains in the first quarter.
However, the overall picture remains one of hesitancy and fragility, with lingering concerns over inflation, access to finance, and geopolitical risk.
Jonathan Ashworth, Chief Economist at ACCA, noted: “After rising strongly in Q1 2025, confidence among UK small and medium-sized enterprises (SMEs) only registered a modest improvement in Q2, and remains depressed by historical standards.”
The survey’s capital expenditure and employment indices showed marked improvement from the previous year, but both indicators remain below historical averages.
The New Orders Index rose for a third straight quarter, suggesting a gradual return to investment planning, while firms also reported improved intentions around staffing and skills development.
Still, Ashworth cautioned that the momentum is weak.
“There were quite large gains in the Capital Expenditure and Employment indices, but both remain at low levels historically, consistent with ongoing caution among firms,” he said.
“Meanwhile, it was encouraging to see that cost pressures for firms look to be becoming a little less severe.”
The data collected before the government’s recently announced Industrial and Trade Strategies showed that many firms continue to struggle with payment delays and access to finance.
The finance access index recorded a sharp decline in Q2, while late payment issues rose for the second quarter in a row.
Glenn Collins, Head of Technical and Strategic Engagement at ACCA UK, said that firms need more certainty to shift from resilience to growth.
“The UK economic and global outlooks remain challenging for business,” he said.
“The publication of the industrial strategy, trade strategy and upcoming small business strategy are important steps, but business needs to see steps from the Government that it is focused on providing certainty.”
He added that the forthcoming Budget would be a critical opportunity for policymakers to signal long-term commitment to supporting growth.
Globally, the report showed a shift in risk perception among accountants. For the first time, geopolitical instability overtook economic concerns as the top perceived risk to business.
Regulatory and compliance risk ranked second, tied with economic fears. Talent shortages and cybersecurity, while still prominent, were deemed slightly less urgent compared to prior quarters.
Climate change, fraud, and supply chain challenges remained lower priorities globally, suggesting that firms are focusing their attention on near-term external volatility—particularly conflicts, regulatory unpredictability, and economic headwinds.
Ashworth concluded: “While some encouragement should be taken from the improvement in our key indicators this year, they still remain indicative of a very challenging backdrop for the UK economy, and developments with the global economy pose downside risks in the second half of the year.”
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