Business confidence in the UK economy plummeted in June, according to a recent survey from the Institute of Directors (IoD).

The IoD's directors' economic confidence index, which measures business leaders' optimism in the UK economy, fell to -31 last month, down from -6 in May, "wiping out" improvements recorded in the first half of 2023.

Out of more than 800 respondents, 33% said stubborn inflation was the main reason behind their loss of confidence, compared to just 26% in January.

In June, the Office for National Statistics reported that inflation rose by 8.7% year-on-year in May, unchanged from April.

Meanwhile, 19% of business leaders in the IoD's index cited falling customer demand as their main concern, up from 11% in January.

Other reasons cited included political instability and ongoing supply chain problems.

Firms were also less likely to commit to investment in June, with net investment intentions falling from +22 in May to +11 in June.

Kitty Ussher, chief economist at the IoD, said:

"With business confidence in the economy plummeting, many investment plans that had only recently been dusted down are now being put on hold again as business leaders consider whether the overall business environment is now too risky to be considering expansion."

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