Market Update: Business insights and impact on the UK economy – Full Analysis

Turnover

Trading businesses were asked how their turnover in January 2026 compared with December 2025, excluding any seasonal trading.

Nearly a third (31%) of trading businesses reported that their turnover had decreased in January 2026 compared with the previous month. This was broadly stable with December 2025, which was the highest proportion since the question was introduced in March 2022, and 3 percentage points up compared with January 2025. However, the movements are broadly in line with those observed around this time in previous years, with peaks in December followed by small falls in January. 

The industries with the highest proportion reporting that turnover decreased in January 2026 were:

• the accommodation and food service activities industry (52%, which is a 21 percentage point rise from December 2025)

• the other services industry (45%)

• the arts, entertainment and recreation industry (40%)

Approximately 16% of trading businesses reported that their turnover increased in January 2026, which was a 3 percentage point increase compared with December 2025. Less than half (44%) reported that their turnover stayed the same.

For trading businesses with 10 or more employees, 33% reported that their turnover had decreased, which was broadly stable compared with December and January 2025. More than one in five (23%) businesses reported that their turnover had increased, up 2 percentage points compared with December 2025.

Generally, the proportion of businesses reporting that their turnover increased correlated to the size of the business. The proportion was 15% for businesses with 0 to 9 employees, while the proportion was 31% for businesses with 100 to 249 employees. The exception to this was the proportion for businesses with 250 or more employees, which was 25%, and 5 percentage points lower than December 2025 (30%).

Turnover expectations

Trading businesses were asked how they expect their turnover to change in the coming month. This can then be used to predict how the business’s turnover will actually change once that calendar month concludes. Turnover expectations can, therefore, be used as an indicator of the direction of future turnover.

Although trends between expected turnover and actual turnover have broadly moved in the same direction, the movements for expectations tend to be larger.

More than one in five (21%) trading businesses expect their turnover to increase in March 2026. This is a 6 percentage point rise from February 2026 but was broadly stable compared with expectations for March 2025 (22%).

The proportion of trading businesses expecting an increase in January 2026 was 13%, while the proportion that reported an actual increase in turnover in January 2026 was 16%, suggesting a slight pessimism in businesses expectations.

When comparing expected turnover ahead of a particular month and the actual reported turnover, businesses tend to be more optimistic in their expectations than reality. However, the trends have broadly followed each other since the questions were introduced in April 2022. The results for March 2026 follow the trend from previous years, with the percentage of businesses expecting turnover to increase peaking after a decrease in January.

Larger businesses were more likely to expect an increase in turnover in March, with the proportion ranging from 20% for businesses with 0 to 9 employees, to 42% for businesses with 100 to 249 employees. This pattern has been observed since the question was introduced to the Business Insights and Conditions Survey in April 2022.

Around one in eight (13%) trading businesses expect their turnover to decrease in March 2026; 7 percentage points down compared with February 2026 and the same proportion as March 2025. The proportion of trading businesses that expected a decrease in January 2026 was 25%, while the proportion that reported an actual decrease in turnover in January 2026 was 31%.

The proportion of businesses expecting turnover to decrease for a particular month ahead of time has remained substantially lower than the proportion of businesses reporting an actual decrease in that month since April 2022. This suggests that businesses are optimistic in their expectations. However, expectations for turnover to decrease have consistently followed the same trend, as actual reported turnover decreases throughout this time.

Turnover challenges

Trading businesses were asked what challenges, if any, were affecting their turnover in early February 2026.

Around 3 in 10 (30%) trading businesses reported that economic uncertainty was having an impact on their turnover, which was broadly stable with early January 2026. This has been the most reported challenge since early October 2022.

Other challenges reported included:

• competition (21%), broadly stable with early January 2026

• cost of materials (20%), the same proportion as early January 2026

• cost of labour (18%), down 4 percentage points from early January 2026

Fewer than 3 in 10 (29%) trading businesses indicated that they were not currently experiencing any turnover challenges. This is broadly stable compared with early January 2026 and 2 percentage points down compared with a year ago.

For trading businesses with 10 or more employees, cost of labour was the most frequently reported challenge, at 36%. This was broadly stable compared with early January 2026. Businesses with 10 to 49 employees were more likely to report cost of labour as a challenge than businesses with 250 or more employees (37%, compared with 20%).

One in five (20%) trading businesses with 10 or more employees indicated that they were not currently experiencing any turnover challenges in early February 2026.

Further details on financial performance, including all response options categorised by industry and size band, are available in our accompanying dataset.

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