Business leader confidence jumps in January

The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, jumped to -48 in January 2026, from -66 in December 2025.

Business leader confidence in their own organisations also jumped, to +14 in January from -4 in December. The underlying indicators, particularly revenue and export expectations, also saw significant improvements: revenue expectations rose to +23 from +8 (highest since September 2024). Export expectations rose to +11 from +5 (highest since July 2024). Headcount expectations rose to -2 from -14 (highest since October 2025). Investment intentions rose to -5 from -21 (highest since May 2025). Cost expectations fell marginally to +81 from +84

Anna Leach, Chief Economist at the Institute of Directors, said “After record weakness last year, January saw a welcome – and fairly chunky – rise in the confidence of business leaders. There’s been an improvement across-the-board in the economic measures too, with the strongest improvements in revenue expectations and investment plans. Headcount plans have improved as well, but expectations for both headcount and investment remain in negative territory – marking the longest period of weakness in those areas of business spend in our survey’s history. Overall, there’s a sense that, while revenues and general conditions have stabilised, businesses are not yet ready to increase either their capital or labour costs materially.

“The year has begun with a high level of policy activity, including a number of packages designed to support businesses – from backing scale-ups and funding for export growth, to business rates relief for pubs and live music venues. But these welcome moves continue to clash with very significant rises in the cost of doing business in the UK. There remains a need to ensure that the full weight of government policy is focused on driving up growth. In particular, we look for further progress in designing-out the risks to employment from the Employment Rights Act, alongside faster action to remove regulatory blockers to growth.”