The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, fell to -72 in July 2025 from -53 in June. This exceeds the previous record low of -69 in April 2020 and marks the lowest reading of the Index since its introduction in July 2016. Business leader confidence in their own organisations also fell to -9 in July 2025, from +3 in June. This is the second lowest reading of this indicator since its introduction in July 2016.

This negative trend is also reflected in the underlying indicators:

Export expectations fell to -4 in July 2025, from +4 in June. This is the lowest reading of the indicator since its introduction in April 2023, and the first negative reading recorded.

Investment intentions fell to -27, from -10 (matching low of -27 in November 2024 – series low -43 in May 2020).

Revenue expectations fell to -8, from +8 (lowest since October 2020 – series low -57 in April 2020).

Headcount expectations fell to -23, from -10 (lowest since November 2024, -24).

Cost expectations rose to +84, from +81 (series high +87 in February 2025).

Wage expectations rose to +65, from +40.

Elsewhere, 85% of business leaders thought that government policy so far will be unsuccessful in driving up economic growth (66% indicated very unsuccessful). When asked which areas business leaders would most like the government to address to support their business, IoD members highlighted taxation (68%), the cost of employment (64%), and the regulatory burden (48%) as the top priorities.