What UK business leaders really think about the economy

There is a puzzle at the heart of British business right now, and our latest data captures it perfectly.

Ask the leaders of the UK’s small and medium-sized businesses how the economy is doing, and the answer is bleak. Ask them how their own business will do, and the mood transforms. That gap, between what leaders see around them and what they intend to build, is the real story of the economy in 2026.

What our Members are telling us

The Q2 2026 Vistage CEO Confidence Index surveyed business leaders across the UK and Ireland. The headline findings:

• 60% say economic conditions have worsened over the past year. Just 7% report an improvement
• 43% expect conditions to worsen further over the next twelve months
• Yet 61% expect their own sales revenue to grow
• 43% expect to improve profitability, and the same proportion plan to increase headcount
• 41% plan to increase fixed investment
• And 93% are actively investing in developing their managers and leaders

Read those numbers together and a clear picture emerges. Britain’s business leaders are realistic about the environment, but they are not resigned to it. They are still hiring, still investing, still backing themselves.

The environment they’re navigating

That optimism is not naive. It is being tested daily.

On paper, there is good news. Inflation has eased to 2.6%, and the UK is growing at or near the top of the G7 table. But the picture on the ground is more complicated. Energy prices are climbing again, the Bank of England has held rates at 3.75% with a decision looming at the end of July, and the labour market is visibly cooling: job vacancies have fallen to a five-year low, and the number of young people not in education, employment or training has passed one million for the first time in over a decade.

For an SME leader, this is the daily reality behind the macroeconomic headlines. Costs are rising faster than confidence in the wider economy. Customers are more price-sensitive. And every hiring or investment decision carries more weight than it did a year ago.

Why the optimism matters

Here is what policymakers and commentators too often miss. That 61% still planning to grow is not a rounding error. It is the engine of the recovery everyone says they want.

SMEs account for the majority of private sector employment in the UK. When six in ten of them plan to grow revenue despite a hostile backdrop, that appetite is a national asset, and a perishable one. Every month of uncertainty over costs, tax and energy risks converting that intent into caution, and caution into growth that never happens.

The businesses that will come through this strongest are not the ones waiting for perfect conditions. They are the ones making deliberate decisions now, testing their thinking, and investing in the leadership capability to adapt. That 93% investing in their people, even in a downturn, tells you where the smart money is going.

No leader should face this alone

The most striking thing about this data is not the pessimism about the economy. It is the resilience underneath it.

But resilience is easier to sustain when you are not carrying it alone. The decisions that determine whether a business grows or stalls in a year like this are hard, and they are lonelier at the top than anywhere else. That is precisely why peer perspective, honest challenge and shared experience matter more in a downturn, not less.

Britain’s business leaders are betting on themselves. Our job is to make sure they never have to lead alone.

The Vistage CEO Confidence Index is a quarterly survey of business leaders across the UK and Ireland. Vistage is the world’s largest peer advisory organisation for small and medium-sized businesses.

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