The Office for National Statistics (ONS) has published its Business Insights and Impact on the UK Economy bulletin, capturing sentiment from trading businesses surveyed up to late January 2026. With 20% of respondents expecting turnover to decrease next month—a reduction from 25% in January but stable against February 2025 levels—the data points to a tentative easing of pessimism amid ongoing economic pressures.

Turnover Expectations Show Mixed Signals

Nearly one in six trading businesses (16%) foresee turnover growth in February, up three percentage points from the prior month and consistent with last year's patterns. Larger firms appear more optimistic: 28% of businesses with 100-249 employees expect increases, compared to just 15% among micro-businesses with fewer than 10 staff. The accommodation and food services sector faces the steepest challenges, with 36% predicting declines, though this is a sharp 17-point improvement from January.

Price Pressures Easing Slightly

Over one in five firms (21%) plan to raise prices on goods or services in February, down two points from January's peak since mid-2025. Sectors leading price hikes include accommodation and food (38%), wholesale and retail (26%), and manufacturing (25%). Meanwhile, 53% expect prices to hold steady, up from January but below last February's levels.

Labour Costs Drive Inflation Concerns

• Labour costs top the list of price-rise factors at 29%, stable from January's record high.
• Energy prices (20%) and raw materials (20%) follow, both showing minor declines or stability.
• Finance costs affect 17% of businesses.
• 41% report no plans to increase prices.

Worker shortages persist, with 16% of firms employing 10 or more staff reporting difficulties—the lowest since October 2021, yet unchanged year-on-year.

Broader Economic Context

ONS cautions that expectation data may reflect partial business oversight. This survey aligns with wider forecasts of subdued GDP growth around 1.4% for 2026 and inflation easing to 2.5%, per the AHDB economic outlook, amid tight household budgets and rising minimum wages. Businesses prioritising cost control over investment risk entrenching low productivity, particularly in agriculture where farm incomes are projected to fall sharply.

As the UK navigates geopolitical uncertainties and fiscal tightening, these insights offer a snapshot of resilience tinged with caution, with no major economic data releases scheduled for 3 February.