The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy continued to fall in September to -38, from -12 in August 2024. This is the lowest result that the Index has registered since December 2022 (-58).

Business leader confidence in their own organisations also fell from to +23 in August to +15 in September, having already dropped from +36 in July.

Business investment intentions registered their lowest level since September 2020, and their sharpest drop since the outset of the pandemic – dropping from +24 in July, to +10 in August and now -6 in September.

Headcount expectations also continued their downward trend, dropping from +10 in August to +6 in September, having already fallen from +24 in July.

Anna Leach, Chief Economist at the Institute of Directors, said:

“Business confidence and investment expectations both took a further and larger dive in September. IoD members cite ongoing concerns over likely tax increases, the cost of workers’ rights, international competitiveness, broader cost pressures and the general outlook for UK economic growth.

“There are a number of policy announcements forthcoming which could help foster a more supportive environment for growth and investment, and underpin an improvement in business confidence. In the next few weeks we expect to see more detail on industrial strategy, the business tax roadmap and a likely update to the fiscal rules to better recognise the contribution of public sector investment to the UK’s asset base. These all have the potential to create a more steady environment for business decision-makers in the UK.”