Business confidence in the UK has climbed to its highest level in almost two years, according to the latest independent survey of business activity, in a sign that the country remains an attractive destination for international companies considering expansion or relocation.
The research found that UK business output reached its strongest point since January 2025 in August, with resilient growth in the services sector continuing despite wider global economic and inflationary pressures.
Optimism among UK businesses also rose sharply, reaching its highest level since before the 2024 Autumn Budget, as firms responded positively to the Government’s business-friendly messaging ahead of this year’s Budget on 28 October.
Optimism within the services sector, which accounts for the majority of UK economic output, rose particularly strongly month on month, reflecting growing confidence that the UK’s investment and growth agenda is beginning to take hold.
Travel and leisure businesses benefited from strong seasonal demand, while manufacturing output also remained in growth territory, albeit at a steadier pace.
The employment market, meanwhile, is showing signs of stabilising after a difficult period, with the pace of job losses slowing and hiring intentions holding broadly steady – a further indicator of improving business sentiment.
For overseas companies weighing up where to invest, the data points to a UK economy that is regaining momentum, underpinned by a stable regulatory environment, deep pools of skilled talent and continued Government focus on investment and innovation.
International businesses considering the UK should take advantage of the current window of improving sentiment. We are on hand to help newcomers navigate tax, regulatory and operational considerations as they set up in the market.
With the Autumn Budget now less than two months away, attention will turn to whether the Government can translate this improved mood into concrete measures that support investment.
For now, though, the direction of travel is a welcome one and a reminder that, for businesses looking beyond their home markets, the UK continues to offer real opportunity.
For expert advice on tax when trading internationally, get in touch with our team.