Business confidence reaches its highest level since October's budget as Trump delays tariffs
According to a new survey by the Institute of Directors (IOD), UK business confidence has climbed to its highest level since last fall’s budget, the highest level that President Trump decided to postpone the full implementation of his mutual tariff regime.
The organization's economic confidence index rose from -58 in March to -51 in April, reaching its highest point since September 2024. The findings are based on a poll of 648 business leaders conducted from April 11 to 29.
IOD said business leaders have begun to increase recruitment and investment plans for the second consecutive month, and the expectation costs have begun to ease.
Data show that uncertainty surrounding U.S. trade policy, especially Trump’s aggressive new tariff strategy – is more severe than the rise in domestic taxes introduced in the October budget by Rachel Reeves.
Starting April 6, employers' national insurance contributions rose from 13.8% to 15%, with a low threshold for payments, and the national minimum wage rose by 6.7%. These changes triggered a sharp decline in business sentiment last fall, a trend worsened by an unexpectedly steep tariff plan announced by Trump on April 2 and is now postponed for 90 days.
“The overall sentiment of business leaders has improved as the worst tariffs in the U.S. was suspended for 90 days. The most concerned areas are uncertainty arising from U.S. tariff policies, which both slowed down and slowed down contracts, and a sharp increase in contracts lowering, as well as a sharp rise in costs after the budget for the previous year.”
Leach added that many businesses were frustrated by Westminster’s lack of support: “The frustration among business leaders is strong, and the government has quickly raised costs, but adopting policies slowly to support them in growing their businesses.”
Mixed signals in the economy continue to complicate the outlook. Although official GDP data from the National Bureau of Statistics showed that expected growth in February was 0.5% higher than expected, the newer comprehensive purchasing managers index (PMI) in April showed that private sector activity slowed at the fastest pace in 29 months.
To further caution, the IMF lowered its UK growth forecast for 2025 to 1.1%, down from 1.6% earlier this year, citing weak productivity and the global impact of U.S. trade policy.
At present, the temporary pause of Trump’s tariffs seems to have eliminated some direct melancholy, but as the 90-day countdown has already ticked, business confidence may live briefly without further clarification of international trade and domestic economic policies.
