Welcome to our fifth newsletter for 2025 aiming to bring you the latest in financial news and updates. This month Porter Garland Chartered Accountants focus on the following topics.
First our lead story:
BUSINESS CONFIDENCE HITS TWO-YEAR LOW: According to a new survey from the Institute of Chartered Accountants in England and Wales (ICAEW), business confidence in the UK has dropped to its lowest level in two years.
The industry body found that rising tax concerns, persistent cost pressures, and weakening sales expectations weigh heavily on companies. Its business confidence index fell to -3 in the first quarter of 2025, down from 0.2 in the final months of 2024. This marks the weakest reading since late 2022.
ICAEW surveyed 1,000 chartered accountants, over half of whom (56%) cited tax increases as a growing challenge – the highest proportion since the survey began in 2004. The pressure comes after Chancellor Rachel Reeves raised employer National Insurance contributions as part of a £40 billion tax package introduced on 6 April.
Meanwhile, international headwinds are also adding to the strain. US President Donald Trump’s renewed trade war is expected to dent UK economic growth, with the National Institute of Economic and Social Research warning that high US tariffs could push GDP growth close to zero in 2026.
Despite stronger-than-expected growth in February, official figures show a 0.5% economic uptick and business sentiment remains fragile. Surveys suggest job shedding at levels not seen since the 2008 financial crisis, though official labour market data has painted a more resilient picture.
And other stories:
BANK OF ENGLAND EXPECTED TO CUT RATES IN MAY: The Bank of England (BoE) is now widely expected to cut interest rates in May, as escalating trade tensions sparked by Donald Trump’s tariff hikes weigh heavily on the global economic outlook.
GOVERNMENT STEPS IN TO SAVE BRITISH STEEL: The UK Government has taken control of British Steel’s Scunthorpe plant after passing emergency legislation in a rare Saturday sitting of Parliament.
RISING EMPLOYMENT TAXES HIT UK HIRING: Nearly half of UK businesses are rethinking their recruitment plans in response to higher employment taxes and labour costs.
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