LONDON (Reuters) -British business leaders have turned their most optimistic about the economy since before finance minister Rachel Reeves’ autumn budget, according to a survey that suggested U.S. President Donald Trump’s tariff pause was easing concerns.
The Institute of Directors said on Thursday its confidence index – which maps the gap between executives who are positive about the economy and those who are negative – rose to -51 in April from -58 in March, the highest since September last year.
Company bosses’ intentions for investment and hiring also improved.
Anna Leach, chief economist at the IoD, said the overall mood among bosses improved last month as most of the steepest of Trump’s tariffs were paused for 90 days.
“The most prominent areas of concern were uncertainty arising from US tariff policy, which is both slowing down and scaling down contracts, alongside the sharp rise in costs following last year’s budget,” Leach said.
While several policymakers at the Bank of England have said it is too soon to say how the tariffs will affect Britain’s inflation outlook, some have said they may turn out to be disinflationary.
BoE Governor Andrew Bailey, speaking on the sidelines of meetings at the International Monetary Fund last week, said the central bank was taking the risk to growth from the trade war “very seriously”.
The IMF cut Britain’s economic growth forecast for 2025 sharply to 1.1% from 1.6%.
The IoD’s gauge of hiring expectations turned positive for the first time since September which was shortly before Reeves announced a rise in employers’ payroll taxes and a nearly 7% increase in the minimum wage that came into force last month.
The survey of 648 company bosses was conducted between April 11 and April 29, after Trump announced a 90-day pause for higher tariffs on most countries on April 9.
Thursday’s report contrasted with surveys published on Wednesday from earlier in April that showed signs of ebbing confidence among businesses and consumers in Britain.
(Reporting by Suban AbdullaEditing by William Schomberg)
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