UK Business Confidence Plunges as Iran Conflict Drives Up Costs
British Business Confidence Hits New Lows Amid Rising Costs
LONDON, July 2 (Reuters) - British business confidence fell to its lowest since 2022 as the Iran war, which pushed up costs, saps expectations for future sales, a survey of accountants showed on Thursday.
Survey Findings from ICAEW
The Institute of Chartered Accountants in England and Wales said that its quarterly Business Confidence Monitor fell to its lowest since the fourth quarter of 2022 in the three months to June.
Economic Outlook
"Even if the peace deal holds, the weakening in forward-looking sales indicators points to a difficult second half of the year for the UK economy, as the aftereffects of the Iran conflict continue to weigh on activity," Suren Thiru, chief economist at the ICAEW, said.
Key Points from the Survey
Confidence and Cost Pressures
Below are other key points from the survey:
• Fall in confidence was the joint-longest negative streak since the global financial crisis
• Drop reflects weaker expected sales activity and rising costs pressures
• Input prices rose to 4.1% in the three months to June, the highest since the July-to-September period 2024
• Companies said they were struggling to fully pass higher costs on to customers due to weak demand
Concerns for the Year Ahead
• Expectations for input cost growth over the coming 12 months rose to the highest level since Q1 2023
• More than half of the firms surveyed were worried about labour costs and 35% of firms cited concerns about energy prices
• The share of businesses citing transport worries was the highest in over two years
• 24% of firms said they were concerned about late payments, the highest proportion in five years
Survey Methodology
• 1,000 accountants took part in ICAEW's survey between April 13 and June 19
(Reporting by Suban Abdulla; Editing by Muvija M)
