Business confidence in the United Kingdom has fallen to its lowest point in four years, according to a recent report by the Institute of Chartered Accountants in England and Wales (ICAEW). The organisation’s business confidence index declined to minus 14.6 in the second quarter of 2026, marking its lowest level since late 2022.

This downturn continues a trend of negative sentiment in the business sector, with the index remaining below zero for six consecutive quarters. This sustained period of pessimism is the longest since the global financial crisis in 2008.

ICAEW chief executive Alan Vallance cited external and domestic factors as contributing to the decline. He highlighted the impact of the conflict in Iran, noting that the resulting uncertainty has significantly affected business sentiment. Vallance also pointed to the upcoming period of political transition in the UK, with a change in prime minister expected this summer, describing it as a “summer of domestic uncertainty.”

Vallance called on the incoming prime minister to focus on creating a stable economic environment that supports company growth and resilience. He emphasized the importance of restoring confidence to facilitate business investment and expansion during a challenging economic landscape.

The report underscores ongoing challenges facing the UK economy, with geopolitical tensions and political shifts influencing business outlooks as companies prepare for a period of heightened uncertainty.