Business confidence improves despite rising concerns about Iran conflict

02 Jun 2026

Confidence in both the UK economy and their own organisations rose amongst business leaders during May, according to research from the Institute of Directors (IoD).

The IoD Directors' Economic Confidence Index, which measures business leader optimism in regard to prospects for the UK economy, rose to -53 in May 2026 from -64 in April.

Business leader confidence in their own organisations also rose to +23 in May from +8 in April. This is the indicator's highest reading since August 2024.

However, concerns over geopolitical tensions remained high as one of the top three risk factors.

Anna Leach, Chief Economist at the IoD, said: 'Amidst what feels like an eery calm in broader business conditions, it's the quarterly questions on global risk which highlight rising concern over the Iran conflict.

'Two thirds of business leaders put a global economic slowdown at the top of their risk list, with half worried about geopolitical risks, while cybersecurity concerns also remained elevated. With cost pressures likely to rise further in the coming months and financial conditions set to tighten, operating conditions will become more challenging for business.

'To support businesses in driving the resilient growth needed, urgent action is needed to tackle the rising cost of doing business in the UK through bringing down energy and regulatory costs and reforming business rates.'