5th June 2026
The latest Office for National Statistics (ONS) Business Insights survey paints a picture of an economy that is still struggling to find firm footing. While many businesses continue to trade successfully, rising costs, economic uncertainty and pressure on consumer spending remain major concerns across the UK.
One of the clearest messages from the survey is that businesses continue to expect prices to rise. Around one in five trading businesses expect to increase the prices of the goods and services they sell during the coming months. Although this is lower than earlier expectations, it remains above the levels seen a year ago, suggesting inflationary pressures have not disappeared from the economy.
Manufacturing firms remain among the most likely to raise prices, reflecting higher costs for energy, materials and supply chains. Retailers are also facing mounting pressures as they attempt to balance rising operating costs with consumers who are increasingly cautious about spending.
Turnover remains a challenge for many firms. Previous ONS surveys found that nearly a quarter of businesses reported falling turnover compared with the previous month, highlighting the uneven nature of the UK's economic recovery. While some sectors are benefiting from stronger demand, many businesses continue to face difficult trading conditions.
Economic uncertainty remains a significant factor. Businesses report concerns about future demand, labour costs, energy prices and global events. The conflict in the Middle East and its impact on oil and energy markets have added another layer of uncertainty, with firms worried about both direct costs and the effect on consumer confidence.
Labour costs continue to be a major issue, particularly for larger employers. Wage pressures, recruitment difficulties and increased employment costs are weighing on business finances. Many firms are having to absorb these costs while trying to remain competitive.
The survey also highlights concerns about supply chains. While conditions have improved significantly since the disruptions of the pandemic years, businesses are still reporting problems linked to international events, shipping costs and the availability of key materials.
Taken together, the findings suggest that the UK economy is growing, but only cautiously. Businesses are proving resilient, yet many remain wary about the months ahead. Higher costs, fragile consumer confidence and international uncertainty continue to cast a shadow over economic prospects.
For policymakers, the message is clear. The immediate crisis years may have passed, but many businesses are still operating in a challenging environment where profitability, investment and growth cannot be taken for granted. The economy may be moving forward, but it is doing so with one eye firmly fixed on the risks ahead.
Main Points
In May 2026, 66% of businesses with 10 or more employees reported that their staffing costs (including wages, bonuses, national insurance (NI), and pension contributions) had increased over the last three months, which is up 25 percentage points compared with February 2026, but down 11 percentage points compared with May 2025; large quarterly movements are typically seen at this time because of the change in the financial year.
In May 2026, 44% of businesses with 10 or more employees reported they would adapt to future rises in employment costs by increasing prices, which is down 3 percentage points compared with May 2025; 38% reported they would absorb the costs within profit margins, while 23% reported they would reduce the number of employees.
More than half (54%) of businesses with 10 or more employees reported that their employees' hourly wages increased in April 2026 compared with March 2026, which is broadly stable from April 2025, but up 36 percentage points from January 2026; the change compared with January 2026 is likely because of the April 2026 minimum wage rise.
62% of businesses reported at least some level of concern about energy prices in late May 2026, rising to 73% for businesses with 10 or more employees, which are both broadly stable compared with early May; please be aware that the majority of responses to the Business Insights and Conditions Survey (BICS) were received before the July 2026 energy price cap announcement on 27 May.
Over two-thirds (68%) of businesses reported at least some level of concern about fuel costs in late May 2026, rising to 74% for businesses with 10 or more employees; the transportation and storage industry reported the highest proportion of concern (84%), followed by the accommodation and food service activities industry (82%).
In May 2026, 34% of businesses with 10 or more employees reported they were concerned about international conflict impacting supply chains over the next year, which is down 4 percentage points from April 2026 but up 25 percentage points from December 2025; 25% were concerned about the impact of shipping disruption, which was broadly stable from April but up 18 percentage points from December 2025.
Read the ONS report HERE