UK companies least pessimistic in two years about growth outlook - CBI

(Sharecast News) - Business expectations for growth in the next three months were at their least negative in October in two years, according to a survey released on Wednesday. The Confederation of British Industry's latest growth indicator showed the balance of private sector companies expecting activity to fall in the next three months improved to -8 in October from -14 in September.

A balance is the weighted percentage of companies reporting an increase minus those reporting a decrease.

The brighter outlook was driven mainly by distribution firms, where expectations for sales growth were also at their least pessimistic in two years. Similarly, manufacturers expected output to stabilise in the next three months.

Services firms continued to expect a mild decline in activity, but predictions for growth in both business & professional services and consumer services were less negative than the averages seen over 2026 to date.

CBI chief economist Alpesh Paleja said: "The easing pessimism about growth prospects chimes with a range of other data signalling a degree of resilience in the economy and will come as welcome news to the Chancellor ahead of the Budget. There are more examples of businesses reporting firmer order books, improving enquiries and new contract wins, particularly among those benefitting from specialist areas of demand.

"However, these signs of improvement remain uneven, and are often driven by firm-specific factors rather than a broad-based strengthening in demand. Businesses continue to report cautious consumers, delayed investment decisions, and persistent cost pressures squeezing margins and operations.

"Fears about the Budget have compounded these pressures, presenting a new headwind to growth over recent months. If the government is serious about matching its economic ambitions with action, the Chancellor must now take the bold decisions needed to give business the breathing space to invest, hire and grow. That means cutting the costs holding firms back, simplifying the tax system and accelerating decisions that unlock growth. Get those conditions right and firms across the UK will respond with more jobs, increased investment and stronger growth."

The CBI growth indicator is a composite measure of activity, based on responses to CBI surveys. In total, 848 firms responded between 25 September and 14 October.