UK economic confidence is at a new low: 4 ways to boost your business confidence

For business to flourish, there needs to be real confidence among business owners, entrepreneurs and the wider market. But with the world in such an uncertain place in 2025, economic confidence is in short supply at present.

The IoD Directors’ Economic Confidence Index, which measures business leaders’ optimism in prospects for the UK economy, fell to -72 in July 2025 from -53 in June.

This exceeds the previous record low of -69 in April 2020 and marks the lowest reading of the Index since its introduction in July 2016.

So, what can we do as a UK business community to boost our levels of confidence?

As a business owner, there are certain external conditions and threats which are outside your direct frame of influence. We can’t directly change economic conditions and the current geopolitical threats that make trading in 2025 such an unpredictable ride.

But there are ways to improve your direct confidence in your own business and, by doing so, create a groundswell of confidence among your wider network.

Here are five ways to increase confidence in your business

1. Deepen your understanding of your market

Invest as much time as possible in understanding your customers' evolving needs and the perceivable patterns and trends in your market. Armed with this knowledge, you can make informed strategic decisions and feel confident that you’re in tune with customer expectations.

2. Develop, innovate and diversify

Based on your customer research, develop new products, services or revenue streams that target emerging needs in the market. Diversifying into new niches helps you reduce your reliance on single income sources and builds a stronger base for the business.

3. Make your finances more resilient

Create a solid financial buffer by investing profits back into some substantial cash reserves. Having cash in the bank means you’re more able to withstand any future economic shocks, giving you a strong sense of security and increased confidence in the future of the company.

4. Become part of your local business community

Get involved in local business groups and look for mentors and fellow business owners to help you broaden your knowledge and entrepreneurial skills. Sharing insights and learning from your peers helps you feel less isolated and better prepared to face any future challenges.

5. Invest in tech, AI and digital adoption

Make your business as agile, efficient and scalable as possible by investing in the latest technology. Automation and AI agents can help you streamline many of your most costly and time-intensive processes, helping you run a business that’s effective and productive.

Weathering the ups and downs of the current economic storm isn’t easy. But the journey is much smoother when you have an expert business adviser on your side.