Business leader confidence in the UK economy fell to -28 in December 2023 after hitting -21 in November, according to the latest economic confidence index from the Institute of Directors (IoD).
The decline is in contrast to business leaders' confidence in their own enterprises, which surged to +36 in December - a notable uptick from the +30 recorded in November.
Positive trajectories were also observed in revenue and export expectations for December. The net outlook for revenue in the next 12 months, compared to the last year, climbed from +37 in November to +42 in December.
Similarly, export prospects exhibited an upward trajectory, escalating from +15 to +20 in the final month of the year.
Despite the fluctuations in these key indicators, underlying factors were relatively unchanged.
Business investment expectations held firm at +23, mirroring the +22 reported in November. Likewise, projections for costs and wages maintained their ground at +74 and +69, respectively. Headcount expectations fell slightly from +25 in November, settling at +24 in December.
The IoD directors' economic confidence index relies on responses from Institute of Directors members, gauging their optimism about the wider UK economy over the next 12 months.
Dr. Roger Barker, director of policy at the IoD, said:
"Business leaders remain extremely cautious about the outlook for the wider economy over the next 12 months, although they are more optimistic about the prospects for their own organisations.
"In the coming months, the Bank of England will be considering its next step in terms of interest rates. Based on the evidence of this survey, an early cut in interest rates would be justified in terms of helping to kick-start business confidence."
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