UK SME leaders prioritise resilience amid rising costs & budget doubts
New research from Vistage provides a cautious outlook for UK SMEs as business leaders prepare for the Autumn Budget amid economic uncertainties.
The Vistage Q3 2025 CEO Confidence Index indicates that while 57% of SME leaders anticipate revenue growth in the coming year, fewer than one in ten expect any improvement in the wider economy. The index itself has declined to 88, down from 89.5 in the previous quarter and significantly lower than the 107.1 recorded in Q2 2024.
Low confidence in economic policy
Economic confidence among SMEs remains subdued, particularly regarding the government's ability to support business growth. According to the survey, 76% of respondents hold little or no confidence that the forthcoming Autumn Budget will deliver policies to benefit small and medium-sized enterprises.
When asked what would improve confidence in the economy and support SME growth, 58% of business leaders prioritised cuts to business taxes, such as Corporation Tax or Employer National Insurance. Other key measures cited included investment in infrastructure (20%), reducing regulatory burden (10%), targeted investment incentives (9%), and labour market support (4%).
Pricing pressures persist
The data reveals ongoing cost pressures for SMEs. As rising costs take effect, 42% of businesses stated they expect to increase prices in the near term. Additionally, 19% of respondents reported having already raised prices by 7-10% since the start of the year.
These price adjustments coincide with signs of weakening consumer demand. According to the Vistage report, one in four small business leaders have observed a noticeable drop in customer demand. This combination of inflationary pressures and softening demand points to the delicate balance SMEs must strike between sustaining profitability and maintaining customer relationships.
Maintaining growth ambitions
Despite the uncertain economic backdrop, the survey highlights a strong intent among SMEs to continue investing in personnel. More than a third (37%) of SME leaders plan to grow their workforce over the next 12 months. Most SMEs are adopting flexible working patterns, with almost two-thirds utilising hybrid arrangements that blend remote and in-person work. In contrast, just under a third currently require all employees to work onsite.
The survey also underscores the ongoing importance of employee engagement. Teams' well-being is a clear priority; regular one-on-one meetings and engagement surveys are used to monitor sentiment, and efforts are being made to foster positive workplace cultures, recognise achievement, and offer opportunities for professional development.
Leadership perspectives
Our latest index reflects a complex picture facing SMEs in the UK and Ireland. While leaders are grappling with rising costs, weaker customer demand, and uncertainty around government policy, many are still focused on growth - planning to expand their team and invest in employee engagement. The results show that SMEs are navigating a challenging economic environment and making decisions to safeguard both their people and their bottom line.
Rebecca Drew, Managing Director for Vistage UK and Ireland, also commented on the response of leadership teams to current challenges:
As such, the leaders most adept at navigating uncertainty are actively turning to their peers for perspective and guidance, helping them make informed decisions and position their businesses for long-term success.
The quarterly Vistage CEO Confidence Index aims to track sentiment among business leaders and provide insight into how SMEs are adapting to market challenges. The latest survey results indicate that, for many, the focus remains on safeguarding resilience and preparing for future growth, even as broader economic confidence falters.
