UK Business Services Sentiment Hits Highest Since 2024
UK professional services sentiment reached its highest level since August 2024. Consumer-facing firms remain cautious despite growing retail confidence.
Sentiment within the United Kingdom business and professional services sector has improved significantly this quarter, bringing an end to more than a year of consistent declines. A quarterly survey conducted by the Confederation of British Industry (CBI) revealed that optimism among professional services firms surged to -3 in February from -50 in November, marking the highest sentiment reading since August 2024.
While professional services showed signs of recovery, consumer-facing businesses remained largely downbeat. Optimism in the consumer services sector stayed deeply negative at -45, a minor improvement from the -47 recorded in November. Charlotte Dendy, the CBI’s economic surveys and data manager, noted that the lack of momentum in consumer services could hinder broader economic progress.
"With little sign of improvement in consumer services, overall momentum is likely to remain weak – weighing on investment and employment prospects."
In a separate report, the British Retail Consortium (BRC) indicated a potential shift in consumer sentiment, which rose to its highest level since June 2025. However, BRC Chief Executive Helen Dickinson cautioned that the economic environment remains challenging due to slow growth and labor market pressures.
"The lift in confidence is encouraging, but fragile."
The broader economic outlook remains cautious as the Bank of England recently adjusted its 2026 growth forecast downward to 0.9% from 1.2%. Finance Minister Rachel Reeves is scheduled to present updated forecasts from the Office for Budget Responsibility on Tuesday. Although unemployment is approaching a 10-year high and wage growth is moderating, recent purchasing managers' data has indicated a pickup in business activity. Inflation is also expected to return to target levels by April, which may provide some relief to living standards in the United Kingdom.
Business leaders remain concerned about the impact of government policy on operating costs. The CBI highlighted anxieties regarding new employment legislation that could complicate workforce management and introduce guaranteed hours for certain part-time staff.
"Service sector firms want to see the government continuing to find appropriate landing zones on the Employment Rights Act and accelerating cuts to the regulatory burden - both critical to tackling the high cost of doing business."
The CBI findings were based on a survey of 351 firms conducted between late January and mid-February, while the BRC data utilized an Opinium poll of 2,000 adults.
