Iran War Knocks UK Business Confidence, Survey Shows

Iran War Causes UK Business Confidence to Drop, Survey Finds

Impact of the Iran War on UK Business Confidence

LONDON, April 2 (Reuters) - British business confidence has fallen as the Iran war exacerbates worries among employers about costs, according to a survey of accountants that chimed with similar concerns from other groups since the start of the U.S.-Israeli attacks.

The Institute of Chartered Accountants in England and Wales said on Thursday that its quarterly Business Confidence Monitor had been on course to turn positive for the first time since 2024 over the first three months of 2026.

But it fell from +2.8 on the eve of the conflict to -1.1 by the end of the 10-week survey on March 16.

Expert Commentary

"The first quarter was a tale of two halves for the UK economy as the early-year optimism was dramatically snuffed out as the Middle East conflict refuelled fears over skyrocketing cost pressures and wider economic conditions," Suren Thiru, chief economist at the ICAEW, said.

Key Findings from the Survey

Trends in Business Confidence

• Confidence has fallen for five quarters in a row, the longest run of downturns in more than six years

Major Concerns for Businesses

• Businesses are concerned about inflation, higher energy costs and supply chain disruption due to the Iran conflict
• More than half worried about labour costs as Britain's minimum wage rises and 35% of firms cited concerns about energy price volatility

Sales and Price Expectations

• Domestic and export sales expectations for the coming 12 months edged down while expectations for the pace of increases in selling prices held at a historically high pace

Survey Participation

• 1,000 accountants took part in ICAEW's survey between January 12 and March 16

(Reporting by Suban Abdulla)