Business Sentiment Tracker: Business confidence falls in Q2 2026

Business confidence has weakened in the second wave of YouGov's quarterly Business Sentiment Tracker, with businesses becoming less optimistic about the economy, their industries, and their own prospects.

YouGov’s Business Sentiment Tracker launched earlier this year, measuring the nation’s enterprises sentiment on the economy, their industry, and their own prospects, with additional questions covering outlook, risk, and AI, among other things.

Data from our inaugural tracker reflected a time of great uncertainty, with the war in Iran ramping up and question marks around the future of then-Prime Minister Keir Starmer. The second edition of our tracker ran over April to June, where some of these questions were more settled (Andy Burnham had won the Makerfield by-election, but was yet to become PM at this stage).

The findings point to a broad softening in business sentiment during Q2. Overall sentiment declined from 61.2 to 59.5 (-1.7 points), with all three underlying measures also moving lower. Economic outlook fell from 43.5 to 41.7 (-1.8), while industry outlook – which tracks whether businesses are feeling positive or negative about their own sectors – saw the largest deterioration, from 66.6 to 64.3 (-2.3). When asked about their own fortunes, businesses were also less confident: scores dropped from 71.0 to 69.4 (-0.6).

The findings suggest businesses are becoming increasingly cautious ahead of the new Prime Minister’s first budget. But what’s behind this growing cynicism? We asked businesses about their expectations for the next 12 months. Some three-quarters anticipate an increase in their operating costs (74%), with just 6% expecting a decrease. The upcoming Autumn Budget, and its policies on enterprise taxation, may well impact sentiment in this area.

At the same time, businesses may be bracing themselves for pressure on profit: 28% are expecting an increase, while 36% are expecting them to decrease. Some 44% say they anticipate an uptick in revenues, with 24% saying the reverse. More enterprises expect employment to go down rather than up, with 20% expecting an increase and 24% expecting a decrease.

54% of businesses say controlling costs is a top priority for the next 12 months 

Given the concerns that operating costs will rise, it’s perhaps no surprise that, when we ask businesses about their top strategic priorities, more than half (54%) say that improving efficiency and bringing expenses down is a top consideration for the next 12 months. The related concern of revenue growth (43%) comes in second.

A significant gap (16-point gap) opens between the top two priorities and the rest. Some 27% say a priority is strengthening financial resilience, with a quarter saying the same of digitalisation and tech adoption (25%) or product/service innovation (24%). A fifth want to focus on expansion (20%), or workforce development (20%).

The findings align closely with our recent VUCA Index, which found that businesses are operating in an environment of heightened volatility while feeling less confident and prepared for the challenges ahead. Combined, the two studies point to a business community that remains focused on growth but is increasingly prioritising resilience, efficiency, and cost management in response to ongoing economic uncertainty.