Confidence among UK accountants remains fragile despite Q2 rise
The ACCA and IMA Global Economic Conditions Survey (GECS) showed that confidence among British SMEs has increased for the second consecutive quarter, although the improvement in Q2 was modest compared with the previous quarter. Confidence remains notably below its long-term average.
After significant challenges in Q4 2024 and Q1 2025, there are some possible signs of optimism. While the capital expenditure index remains significantly below its average, it improved its result this quarter and is markedly improved from its position in Q2 last year.
The New Orders Index improved for the third consecutive quarter which – combined with improvements in the employment and staff investment indices – suggests that the post-Budget shock has somewhat abated, and firms are starting to plan for growth.
These results show considerable noise in the marketplace, and businesses will be looking for certainty in order to plan for growth. The index tracking access to finance has shown much volatility in the recent past, with a sharp fall this quarter. Businesses are also reporting a second quarter increase in problems securing prompt payment.
The publication of the UK government’s Spending Review and Industrial and Trade Strategies came after this data was collected, so the government will likely hope that this will provide some further improvement later in the year.
However, with inflation again increasing, it’s clear that businesses remain in a cautious mood.
