UK private sector activity outlook eases slightly as CBI predicts smaller decline

The Confederation of British Industry’s (CBI) latest Growth Indicator shows the weighted balance of private‑sector activity expected to fall by 18 % in the three months to October, the least negative reading since March following the Iran conflict. The forecast includes modest declines of 14 % in business and professional services and consumer services, a 30 % drop in manufacturing output, and a 20 % fall in distribution sales – the latter the least pessimistic since August 2025.

Private‑sector activity had already slipped 21 % in the three months to July, though that slowdown was the smallest since February (‑19 %). All sub‑sectors reported falling activity. Companies cite subdued demand, hesitant customers, weak confidence and persistent cost pressures that are squeezing margins. Renewed tensions in the Middle East add another headwind.

The CBI notes the economy appears to be finding a floor but not yet firm footing, highlighting the challenge for the new UK Prime Minister and his team. Recent government announcements aim to support households and the high street, but the CBI argues lasting growth will require lowering the cost of doing business, speeding delivery and encouraging private capital investment.