Every two months, we survey 600 mid-sized business leaders across the country to understand their expectations and priorities for the future.

We use this data to track changing market sentiment over time, and explore topical issues and challenges facing mid-sized businesses in the UK. Here's what the latest February survey told us.

UK economic outlook

This round finds that a resurgence of confidence in the market has put a spring in businesses’ step. Net 83% of respondents are optimistic about the outlook for the UK economy, a +11 percentage point (pp) increase compared to December 2024 and the highest level ever recorded by the Tracker. Business pessimism about the UK economy has also dropped -5pp, reaching the lowest level since August 2023. 

Optimism on the outlook of the UK economy over next six months

Revenue growth

Revenue growth expectations also increased significantly in February, up +14pp compared to December 2024, and reaching the highest level seen for two years. Net 8% of respondents are now pessimistic about ​their revenue growth, falling by half compared to December last year.  

Rolling averages for graph: 

  • Optimistic: 72%
  • Pessimistic: 10%

Optimism on business revenue growth over next six months

Funding position

Confidence in their funding position had been on a steady decline since the start of last year but rebounded in February, jumping +15pp to reach the highest level ever recorded by the Tracker. The percentage of businesses pessimistic about their position also decreased in February, -6pp compared to December, despite ongoing concerns from many in the business community about the impact of changes announced in the Autumn Budget.

Rolling averages for graph: 

  • Optimistic: 72%
  • Pessimistic: 9%

Optimism on business funding position over next six months

Profit expectations

Profit expectations jumped back considerably in February, increasing by a significant +29pp compared to December. This is a high not seen for almost two years and is +22pp higher than the rolling average. Only 19% of respondents expect their profits to decrease – a big drop compared to December (43%) and the lowest level recorded since October 2023.

Profit growth expectations over next six months

 

Giles Mullins, Head of Core Advisory said: 

“After years of high inflation, interest rate increases and economic and political turmoil, businesses of all sizes are used to adapting to changing cost environments, putting plans in place to protect their operations and reduce the impact to their bottom line and profit growth. 

This resilience and adaptability is evidenced by mid-market profit expectations, with over three quarters (77%) of business leaders expecting profit increases over the next six months, up from 48% in December 2024. This rapid increase in confidence may reflect an expectation that after a difficult period of low profitability, businesses are expecting growth from a lower base. 

How long this confidence will last though remains to be seen. As we head towards the Spring Statement, the majority of mid-sized businesses are also expecting the Chancellor to increase taxes on businesses again this year.”

 

Business investment expectations

This February round recorded the highest ever levels of respondents expecting to increase their investment across all areas monitored, as well as the lowest ever levels of those planning to decrease their investment. The most significant investment increases are expected in the following areas: 

  • recruitment: +17pp
  • employee wellbeing: +15pp
  • skills development: +12pp
  • ESG: +12pp

A record number of businesses also plan to boost their investment in growing internationally, with a significant majority (83%) of the businesses surveyed believing that the current US administration is likely to be good for British business, amid ongoing speculation around a potential UK-US trade deal and changes to US tariffs.

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