What do accountants and their clients think about the UK economy?
What do accountants and their clients think about the UK economy?
Checking in with accountants and bookkeepers about the clients’ business confidence.
Business confidence in the UK economy has fallen considerably this year according to several sources, reflecting continued anxiety and uncertainty over government policies and global volatility.
Earlier in April, ICAEW’s national Business Confidence Monitor (BCM) for Q1 2025 revealed a -3.0 fall in business optimism for the first time since Q4 2022. This is due in part to higher business taxes, weak UK economic growth and concern over US trade tariffs.
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And confidence among UK small firms dropped to its lowest level (29%) in four years, according to Novuna Business Finance.
However, the IMF this month raised the UK growth forecast to 1.2% and a predicted 1.4% in 2026, boosted by the latest UK trade deals with the EU, the US and India.
But businesses on the whole remain cautious. High business costs and taxation as well as ongoing issues around skills shortages, recruitment challenges and staff retention are creating a difficult environment for many.
So what do accountants think? Are their clients concerned about the UK economy? And do they agree with projected growth forecasts?
There are signs of resilience but the road ahead demands caution
Batool Haider MAAT, Founder and Director, Account Inc Ltd
As someone running a boutique outsourcing firm serving UK accounting practices, I’m cautiously optimistic about the UK’s growth outlook. The UK-EU deal provides a degree of political and trade stability that could encourage business investment. However, persistent inflation, now expected to remain elevated until at least September, continues to squeeze household budgets. This, combined with the threat of US tariffs and rising tax burdens, may dampen consumer demand and business confidence, particularly among the small businesses our clients support. So while there are signs of resilience, the road ahead still demands caution. UK businesses might hesitate to invest or expand, preferring to maintain liquidity and manage risk carefully. For accountants, this economic climate means clients may delay hiring, limit outsourcing, or scrutinize costs more closely. In uncertain times, business owners don’t need fewer accountants, they need better ones. With rising costs and shifting markets, they’re looking for advisors who can help them stay lean, manage risk, and make informed decisions. The demand is still there, but the focus is now on flexibility, clarity, and real financial insight.
Verdict: There are signs of resilience but road ahead demands caution. Good accounting can help business owners survive.
Convincing directors and shareholders that the UK is back in business will be a struggle
Ellis Harris-Boulter MAAT, Founder and Director, FieCo Accountancy
From a distance, the UK finally seems to be gaining some momentum: securing trade deals (India, the EU, the US) and stepping towards U-turns for some of Labour’s more unpopular decisions.
The UK seems to be in quite a favourable position sandwiched between the US and EU; it seems we might avoid the worst effects of the tariffs. These are some of the most major deals we’ve seen since Brexit, and they’re all within the past year – quite an achievement. This is not to mention various recent improvements in economic forecasts and better than expected growth.
However, being first to a deal with the US isn’t necessarily a good thing, as future deal-makers from other countries will look to build on the foundation of our deal. It also feels like we’re giving significant concessions for headline-grabbing but largely inconsequential gains (e.g e-gates at the airport). It raises questions about the broader economic impact of these agreements.
On the ground, the picture couldn’t be more different. Business confidence is low; employment tax hikes in April were no way to stimulate growth and most decision makers I talk to are making cost-savings instead of investing.
There’s now warning signs ahead – inflation rising (especially food, which will hit consumers), and round two of Trump’s tariff policies when the various 90 day pauses come to an end.
There’s no doubt things to celebrate here, but the Government faces an uphill battle to convince directors and shareholders that the UK is back in business.
Verdict: The government faces uphill battle to convince directors that the UK is back in business.
It’s a gloomy outlook overall but resilience shines through
Vipul Sheth, Chartered Accountant and MD, Advancetrack
It’s a gloomy outlook for the UK economy. Everyone is being taxed more than ever – including businesses, which are essential to driving growth.
From an accountancy perspective, nothing much has changed. On paper there are a few welcome additions, particularly the reduction of red tape for food and drink exporters, but generally we’ve seen a lot of well-meaning deals that don’t deliver in practice.
US tariffs will have an indirect impact on the UK. Extra costs imposed by the US government will eventually affect UK businesses, potentially leading businesses to cut back on services or delay investments. In the long term, I’m unsure how likely US tariffs are, as they could damage the US economy itself. But this unpredictability means short-term market volatility is a real risk.
I’m concerned that the current Government is imposing extra costs on businesses at a time when it should be doing the exact opposite. Employers are already having to fight to pay more in National Insurance Contributions and wages, and I fear the Government is already laying the ground for tax rises for businesses in autumn.
However, the resilience of the UK’s small businesses continues to be a bright spot, even in the face of tough conditions. Many are investing in technology, exploring outsourcing and finding new ways to stay competitive despite rising costs and years of economic volatility.
Verdict: It’s a gloomy outlook overall but resilience of small UK businesses continues to shine through.
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