Bank of England Agents report weak UK economic conditions

The Bank of England, via its Agents’ Summary of Business Conditions, reports continued weak UK economic activity and subdued investment due mainly to domestic policy and Budget uncertainty.

• Main findings: Contacts report stagnant consumer spending, deteriorating investment intentions, slightly negative employment plans, and expectations of gradual disinflation through 2026, with 2025 pay settlements averaging 3.9% and early 2026 indications around 3.5%; some growth is noted in defence, aerospace, datacenters, and renewables.
• Context and details: The report highlights weak exports (especially in manufacturing) due to US tariffs, subdued EU and Chinese demand, persistent policy uncertainty (tax, regulation, planning), tight credit for smaller firms, soft housing and commercial property markets, and rising financial pressures on households and charities, while firms increasingly invest incrementally in cloud, AI, software, and cybersecurity to improve productivity.