The first three months of 2023 showed business confidence to sit at just 20% meaning that despite the drop in September, the report still suggests that confidence is being shown to be higher than at the beginning of the year.

A 5% drop in trading prospects has also been reported as 52% of UK businesses expect stronger activity within the next year, while 11% are said to expect weaker activity, as senior economists explain that while confidence is low, it is essential to consider the wider trend.

The decision to not change interest rates should have a positive effect on businesses, allowing them to feel more upbeat about the future and the recent survey reported levels in business confidence remaining well above the 22-year average of 28%, while monthly rises remain larger than falls.

Sridhar Iyengar, Managing Director for Zoho Europe, commented: “The last few years have been extremely challenging for businesses, with many macro-economic factors taking their toll. Rising interest rates, record-breaking inflation hitting a decade-high, supply chain challenges and more have knocked business confidence. It can seem an uphill battle to bolster agility, flexibility and adaptability to become more resilient to cope with these external market forces, and unforeseen ones to come. 

“To ensure businesses are as ready as they can be to face market challenges, leaders should regularly evaluate all aspects of their business, from leadership style, to digital transformation, to suppliers, in order to improve processes, business models, efficiency and more. This is impossible without full visibility of business data to assess performance and impact of changes in real time. It is only with these insights that data can be effectively analysed and used to inform strategic decision-making, something critical especially during turbulent times.

“Choosing the correct technology partners has also never been more important, not just prioritising solutions on offer, but also their business models, vision, value and cultural alignment, to drive long term success and minimise future disruption. This can have a huge impact on business resilience and future success."

Hann-Ju Ho, Senior Economist at Lloyds Bank’s Commercial Banking, said: “Despite some month-to-month movements, if you look at the year in quarterly time periods, confidence has steadily risen from 20% in the first quarter, 26% in the second and now an average of 27% in the third.”