Businesses in the UK, at least, are less confident about their future Business Confidence Index It fell to -14.6, the lowest level since the 4th quarter of 2022. This aligns with many other reports reflecting concern.
According to the report, while exports slowed down, domestic sales were more resilient. At the same time, the increase in input prices caused general prices to rise.
The thesis is that the conflict with Iran increased the decline in business confidence as companies revised their expectations lower.
After geopolitical concerns at 65 percent, labor costs rank second with 58 percent of concerns.
In the second quarter of 2026, input price inflation increased from 3.6% to 4.1% as oil and gas prices increased and supply chain bottlenecks emerged. Rising energy prices are expected to impact other costs, and inflation expectations for next year predict that input price inflation will rise to 3.8% in the second quarter of 2026, from 3.0% in the previous quarter.
Sebastian MarchonCEO at Rydoofinance teams are struggling with rising costs, weak sales and shrinking margins, he says. He says they’re seeing more CFOs looking for technology to improve operational efficiency.
Late payments are another problem that causes short-term cash flow difficulties.
“…paying on time helps companies keep their budgets and forecasts up to date, which is crucial in these uncertain times.”
Politics may help improve the situation but the current turmoil in the Labor government is not helping. At the same time, the government is promoting growth measures while small firms express their difficulties.
