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Feeling more upbeat about the year ahead?

ended 18. February 2026

Inflation is cooling, which means a rate cut in March now looks increasingly likely. But equally, unemployment is rising and the economy is running on fumes, with businesses not hiring because of the fiscal hit (NI, business rates, minimum wage, etc). Based on the jobs and inflation data this week, are you feeling more positive about the UK economy or do you see turbulence ahead? This for a national newspaper story going live later so responses ASAP.

7 responses from the Newspage community

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Kate Allen
Owner at Finest Stays
We’re hearing quiet confidence around UK holidays this year and, without wanting to tempt fate, we’re currently pacing ahead on both occupancy and revenue, so we’re cautiously optimistic. If inflation continues to cool and we see rate cuts, that should help consumer confidence, which is crucial for discretionary spend like travel. That said, the reality for many businesses is still tough. Rising employment costs, National Insurance increases and wider fiscal pressures are making hiring decisions much harder.
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Tony Redondo
Founder at Cosmos Currency Exchange
My UK clients tell me the outlook for the UK economy is a "stagnation sandwich". Yes, there may be tasty interest rate cuts on the outside, but there's a very thin, dry filling of weak growth and hiring in the middle. For the small business owner on the high street, 2026 feels less like a recovery and more like a survival exercise. Any optimism comes from dealing overseas. With everyone online these days, it’s never been easier for any business, however small or new, to have overseas clients and suppliers. Demand in the UK is fundamentally broken and may not recover for some time, so more UK businesses need to start looking overseas.
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Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
Rate cuts might soothe the headlines, but SMEs are still rearranging the deckchairs. From a people perspective, this doesn’t feel like a big sunny turnaround. It feels like employers are gripping the handrail. Inflation easing may take the edge off pay demands, but the real headache is rising people costs and risk. Every hire now feels like: can I afford this person for the next year, and what happens if it goes wrong? This is exactly what I’m seeing with my clients. Owners arpausing recruitment, squeezing capacity, and asking the same team to carry more. That’s when the cracks show. More sickness. More snappy emails. More conflict. Performance dips, managers avoid the awkward chats, and then someone makes a rushed decision. Hello grievance. Hello settlement. Hello stress claim. Am I more positive? Cautiously, for consumer confidence. But for employers, I see turbulence: restructures, role changes, reduced hours and “efficiency” drives.
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Lesley Beauchamp
Director at Express Recruitment
The drop in inflation is a welcome reprieve but the 'fiscal hit' of increased National Insurance and wage legislation remains a significant barrier to growth. While a rate cut would offer some relief, businesses are currently navigating an intense rivalry over shrinking hiring budgets and a cautious labour market. We are seeing SMEs move away from volume hiring to focus strictly on high value, essential roles to protect their margins against these rising costs. Therefore, despite inflation cooling, the rising unemployment figures suggest we should expect continued turbulence as the economy recalibrates throughout 2026.
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Astrid Davies
Founder CEO at ADCL
Leadership development is often one of the first areas to be cut, which is ironic when the tough times are precisely when leadership needs to be at its peak. So it's been an interesting few months. However, I am noticing clients looking for productivity gains and being more on the front foot about their growth plans at the start of 2026. That's where the leadership really counts - the bravery to back yourself. And with a few better signs from the economy, their bravery really is starting to look well-placed. We need all the proactive, positive, responsible leadership we can get at the moment.
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Kerry Bilson
Director at Letterbox Love
As a small business owner, it’s great to see inflation cooling (any sign of stability is welcome). But experience tells us to proceed with caution... The last 18 months have been incredibly hard for small businesses, with rising wages, National Insurance changes, tariff changes and general running costs all adding up, we have been sad to see so many businesses close.

A potential rate cut sounds positive, but confidence doesn’t return overnight.

We do feel positive for 2026 but honestly this is because of how we are choosing to deal with things but in the back of our mind last year taught that no one is safe. Letterbox Love is focused on steady, sustainable growth rather than big bold risks. With so many external challenges being throw our way completely out of our control, we have had to learn to become incredibly adaptable and resilient.
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Colin Crooks MBE HonDsc
CEO at Intentionality
Working across sectors as diverse as architecture, jewellery, manufacturing and catering, I'm seeing a cautious confidence quietly becoming the dominant mood.
The cost pressures of the last 18 months, NI increases, business rates, and minimum wage rises, have either been absorbed or passed on. That pain is largely in the rear-view mirror.
My clients aren't waiting for the economy to give them permission to grow, and a rate cut in March won't fire the starting gun. The businesses I work with are already working to gain competitive advantage and are not just in survival mode.
On jobs, SMEs aren't paralysed but they are being more careful and investing in the right people and capabilities.