Another day, another grim number from the real economy. Business optimism has sunk to 26 per cent. The lowest since February 2025. No amount of spin changes what that means for jobs, investment and the bills ordinary families pay.
The S&P Global survey released on 10 July lays it out plainly. Firms face a triple squeeze: rising labour costs, fears of yet more taxes, and puny consumer demand. Services firms are the hardest hit, with the share expecting output to fall hitting a record high. Manufacturers are not exactly cheering either, down to 38 per cent confidence and bracing for global headaches plus skills shortages.
David Owen, principal economist at S&P Global Market Intelligence, puts it bluntly.
Survey responses signal that a triple squeeze from rising labour costs, worries about government taxation and weak consumer demand have made services firms more hesitant to commit to spending.
Exactly. Businesses are not investing because they see what is coming. Higher national insurance. Minimum wage jumps that sound kind on paper but hammer wage bills. The constant threat of another tax raid. This is not external bad luck. It is domestic policy failure dressed up as fairness.
Look at the services sector. Confidence there has slumped to a joint-lowest since October 2022. Inflation worries are back, partly from the conflict in Iran, but the domestic cost pressures come first. Manufacturers meanwhile reckon their 12-month inflation projections are the highest in over four years. So much for steady growth.
