By Jonathan Prynn
Copyright standard
Confidence in growth among small business leaders in London has slumped to its lowest level since the pandemic, a new survey reveals today.
The percentage of London small businesses predicting growth for final three months of 2025 has dropped to 36%, its lowest level since the 34% recorded in the first quarter of 2021 when the country was still paralysed by lockdowns.
Fear about the contents of Rachel Reeves’s Budget at the end of November appear to be a major factor in the low levels of confidence with 86% of London small business owners saying they fear that it could negatively impact their growth outlook and finances.
The findings are from the Business Barometer study by Novuna Business Finance, which has been tracking small business growth forecasts every quarter since 2015.
The latest study asked small business owners about their growth forecasts for the final three-months of 2025, going into the Christmas trading period.
The proportion peaked at 57% at the start of the fourth quarter of last year but has slumped alarmingly over the past 12 months.
The national picture is also bleak with, for the first time since the launch of the survey, growth predictions down in every industry sector. The 17% of respondents forecasting growth in construction is the lowest since the second quarter of 2024. Retailers are also increasingly gloomy with just 25% expecting growth, down from 33%.
Jo Morris, Head of Insight at Novuna Business Finance said: “ The percentage of small businesses in London predicting growth is higher than the national average, but it always has been. The slide in confidence within the capital is a concern for the country at large.”
“There are various factors at play. Market uncertainty is something small businesses do not like, US tariffs have been a cause of concern through 2025 and, for many small businesses, the long tail of Brexit still impacts business confidence – with fewer small businesses today looking to open up trading opportunities in EU markets. The looming Autumn Budget is also a concern for many, as there has been a lot of speculation about possible tax rises.
“At Novuna Business Finance we remain committed to helping established small businesses to secure funding to power future growth – but the message from small business owners seems to be very clear: they need a context of certainty to plan against and a tax framework that incentivises growth, expansion and investing in new staff.
“We need to see a reversal of the fall in small business growth forecasts we have seen over four consecutive quarters – and all eyes will be on the Autumn Budget for the stimulation package that many small business owners are crying out for. If we want to see growth in the economy, the forthcoming Budget needs to be a ‘Budget for business.’”
The growth outlook research was conducted by YouGov among a nationally representative sample of 1,244 small business owners on 25 September.
