Confidence among UK accounting and finance professionals rose for a second consecutive quarter in Q2 2025, according to the latest ACCA and IMA Global Economic Conditions Survey (GECS), but the improvement was modest and sentiment remains well below its long-term norm.
After a difficult end to 2024 and a weak start to 2025, several core GECS indices showed signs of stabilisation. The capital expenditure index, though still significantly lower than its historical average, posted its strongest quarterly result since Q2 2024. The New Orders index climbed for the third quarter in a row, and both employment and staff investment indices improved, suggesting that firms are cautiously looking beyond the post‑Budget disruption and beginning to plan for growth.
However, the survey also highlighted ongoing volatility. The access to finance index fell sharply this quarter, and businesses reported a further deterioration in prompt payment—a key cash‑flow concern for many SMEs.
Inflationary pressures resurfaced in Q2, contributing to the overall cautious tone. The UK government’s Spending Review, together with its Industrial and Trade Strategies, was published after the survey period, and policymakers will be hoping these measures boost confidence in the coming quarters.
“The UK economic and global outlooks remain challenging for business,” said Glenn Collins, Head of Technical and Strategic Engagement, ACCA UK. “The publication of the industrial strategy, trade strategy and upcoming small business strategy are important steps, but business needs to see steps from the Government that it is focused on providing certainty. The upcoming Budget will need to deliver clear and long-term actions that will support the rebuild of business confidence and a focus on growth.”
On the global stage, geopolitics became accountants’ top risk priority for the first time in Q2, narrowly ahead of economic concerns, which tied with regulatory and compliance risks. Talent scarcity and cybersecurity remained important but receded slightly, while climate change, fraud, and supply chain risks occupied lower positions on the risk agenda.
Jonathan Ashworth, Chief Economist at ACCA, commented: “After rising strongly in Q1 2025, confidence among UK small and medium-sized enterprises only registered a modest improvement in Q2 2025, and remains depressed by historical standards. There were quite large gains in the Capital Expenditure and Employment indices, but both remain at low levels historically, consistent with ongoing caution among firms. There was a very minor gain in the New Orders Index, and it is not very far below its historical average. Meanwhile, it was encouraging to see that cost pressures for firms look to be becoming a little less severe. Our indicators of corporate stress appear to be broadly within the range of values they have recorded in the last few years. All in all, while some encouragement should be taken from the improvement in our key indicators this year, they still remain indicative of a very challenging backdrop for the UK economy, and developments with the global economy pose downside risks in the second half of the year.”
