UK CEOs optimistic on prospects despite wider economic performance

Despite ongoing geopolitical and macroeconomic challenges, new research suggests that business confidence among UK CEOs is growing. According to a new KPMG survey of company leaders, more than nine-in-ten businesses are confident of their firm’s growth in 2025, even though almost half are concerned about rising inflation.

Business confidence is a tricky business. While corporate leaders often feel the need to sound off about government policies or social changes they feel will impact their bottom-lines in the long run, they also are wary of painting so gloomy a picture that they spook investors. So, even as polls of business leaders continue to warn against dire economic prospects for the wider country, the vast majority still suggest their individual firm will be just fine.

This paradox was highlighted at the start of the year, in an EY-Parthenon study which found that 71% of respondents were worried by rapid technological advancements, evolving sustainability agendas and geopolitical tensions. But conversely, 78% felt optimistic about revenue growth, 80% about profitability, and 77% about maintaining a competitive position in the next 12 months.

Now, three quarters of the way through 2025, another study from Big Four rival KPMG suggests CEOs have had no change of heart. While the broader economy is supposedly in a state of disrepair, the vast majority are still expecting good times for their own firms.

According to KPMG’s findings in its ‘Private Enterprise Barometer Pulse 2025’ study, 45% of respondents said they had “major concerns” about inflation. Meanwhile, 32% were concerned by possible tax rises in the government’s autumn budget, and a similar number were worried by rising employment costs – something which bosses have been railing against for some time, even as their employees struggle to keep up with the cost of living.

Amid all this, the respondents also called for specific support from the government in the coming period. A 35% portion argued that the autumn budget should focus on business profitability, while 44% wanted Chancellor Rachel Reeves to prioritise technology adoption – potentially via tax breaks or R&D handouts. And 31% asked for this to support upskilling the workforce, or obtaining new talent.

As desperate a picture as CEOs painted, however, they still struck a bullish note on their prospects, whatever happens. A 62% majority said that they were planning to use internally generated funds to expand or advance their operations in the future – something businesses are usually reluctant to do when they believe risk is high.

This may be because, in actual fact, many businesses are decidedly upbeat, looking forward. A 93% majority of leaders said they were confident for their growth in 2025 – including 65% who were “very confident”. Amid this, a third were pursuing growth via acquisition, and 72% were launching new service lines or products.

In terms of strategic priorities, investment was also high on the corporate agenda. Top of the CEO agenda was technology investment – including AI, cybersecurity and digital transformation – which was cited by 67% of bosses. But 34% said they were still investing in sustainability, and 36% in focusing on upskilling their workforce themselves.