While some sectors have seen resilience in consumer spending and report a positive outlook, concerns over talent, productivity and policy were recurring themes to emerge in our discussions with ICAEW members.

Economic conditions

In higher education, one member warned that “the university sector is struggling as student numbers decline, with the risk of a hollowing out of research and innovation”.

Exporters, meanwhile, continue to face disruption. “International customs now want to check everything is really manufactured in Scotland,” was the experience of one textile manufacturer. In the South West, another manufacturer reported: “Tariffs are driving up distribution costs and sales are suffering, albeit there are some signs of improvement.” Costs and productivity remain key issues with one member offering incentive bonuses to staff.

Recent inflation figures highlighted food price pressure with “poor yields impacting supermarket price and quality”. Members working in fast-moving consumer goods sectors are seeing a shift in consumer habits. “Families are going out less - they don’t have the money” shared a beverage manufacturing business based in the South West. Others reported seeing customers trading down in their choice of products.

In the health sector, there are worrying reports of cash-flow pressures. Although pharmacies anticipate higher profits, “cash flow feels tight”. Dentists are handing back NHS contracts to focus on private work. A practice member who advises the healthcare sector has observed owners taking capital out, “reducing working capital and hitting cash flow”.

Energy

A London-based business warned that energy prices are beginning to filter through and impact the business. Although European gas storage is approaching 80%, members are concerned that a cold winter could significantly push up prices.

Investment in transition projects appears to be increasing, though funding remains tough to secure. “There’s a clear trend in wind, solar and batteries, though grid connection is still a challenge” was a view from the South West. Nuclear remains “buoyant” but needs government backing due to the high capital outlay.

A member in the North West highlighted the challenge associated with grid connectivity: “Data centres are using gas as the primary power as the grid can’t meet demand.”

Skills

Despite an unwinding of labour market pressures, recruitment remains challenging: “People don’t turn up for interviews and when they do, they don’t really want the job” was the experience of a manufacturing business in the South West. A practice in the East Midlands observed: “Students lack confidence in soft skills - a legacy of Covid.”

Others flagged cultural change: “There’s a rise in errors and lack of ownership. Society has a sense of malaise - it has been too challenging for too long.”

In stark contrast, one London-based healthcare business said: “The slowdown has enabled us to hire better talent.”

Across the board, members remain worried about perceived hiring risks due to the Employment Rights Bill, especially businesses without HR departments. As a direct result, there are increased reports of businesses exploring outsourcing as a viable option.

Autumn Budget

The Autumn Budget is adding to unease. “Nothing good will come from this Budget” was the view of a farming business based in the East Midlands. A practice member in the South West advising the sector said: “We’re very busy but panicked now given the Budget. More farm sales are coming through and clients seem more aggravated to do things, when taking a back seat might be wiser.”

Retailers and hospitality businesses remain concerned about labour costs. “Our biggest concern is the National Minimum Wage” noted a sporting retail business in London, a sentiment echoed by others. With Black Friday falling on 28 November (two days after the Budget) and with the Golden Quarter likely to be impacted by what has the making of a major fiscal event, the prospects for the retail sector are anything but clear.

Built on member insights, ICAEW is compiling a Budget submission with a deadline of 15 October 2025. We would encourage members to share their views and insights via our dedicated online form.