Bruised UK firms not ready for another budget battering: BCC Q3 survey

Confidence among business remains flat, with 48 per cent of responding firms expecting increased turnover in the next 12 months, while 21 per cent expect a decrease. That compares with 49 per cent in Q2 and 58 per cent before the 2024 budget.

Meanwhile, only 21 per cent have increased investment and 25 per cent have scaled back plans. 

The data also shows tax remains the biggest concern for businesses alongside increased worries over inflation, a BCC release said. Fifty-nine per cent cite tax as a worry, up from 56 per cent in Q2. Before last year’s budget, only 36 per cent cited tax as a concern (Q2 2024). 

There has been a sharp rise in concern about inflation, cited by 57 per cent of firms (52 per cent in Q2), the highest level since the start of 2024. Worries about interest rates remain at relatively low levels, cited by a quarter of responding businesses (25 per cent).

A fifth (21 per cent) of businesses expect turnover to worsen and 32 per cent expect no change. 

The data show wide sectoral disparities. Only 35 per cent of retailers expect increased turnover in the next 12 months (44 per cent in Q2).

With businesses facing increased cost pressures, investment levels continue to suffer. A quarter of businesses (25 per cent) say they have cut back on investment plans (broadly similar to 24 per cent in Q2). The majority of firms, 54 per cent, say their investment strategy has remained the same, while 21 per cent have increased their plans. 

The issue is more marked in certain sectors, with over a third of hospitality firms (35 per cent) scaling back investment plans (39 per cent in Q2). While the figure for those in the retail sector is 30 per cent. 

The percentage of responding businesses reporting increased domestic sales remains unchanged from last quarter, at 32 per cent. Forty-three per cent reported no change and a quarter said they had seen a decrease in sales. Sectoral breakdowns show increased sales are at their lowest among retailers (21 per cent). 

Around a quarter of businesses (24 per cent) report an increase in cash flow over the last three months, down from 26 per cent in Q2 2025. A third of firms (29 per cent) report a fall in cash flow, while for 46 per cent, cash flow remained the same.

The proportion of businesses expecting to raise their prices in the next three months remains high at 44 per cent. That’s the same level as Q2, but down from a near-historic high of 55 per cent in Q1 2025. Just over half (54 per cent) say their prices are likely to remain the same, and only 3 per cent are expecting them to decrease. 

Labour costs continue to be far and away the main cost pressure for firms, cited by 72 per cent of respondents (73 per cent in Q1).

The survey was carried out by the BCC Insights Unit and the UK-wide Chamber network, with over 4,600 businesses across the country, 91 per cent of whom were small and medium enterprises (SMEs).

ALCHEMPro News Desk (DS)