Around 13% of trading businesses anticipate a turnover decrease in March 2026, down seven percentage points from February and matching last year's levels, per the ONS Business Insights bulletin released this week.

The survey, capturing data from early February 2026, highlights a trading landscape where 93% of businesses remain active: 82% fully trading and 11% partially so, while 4% have temporarily paused and 3% permanently ceased operations.

Persistent Challenges Facing UK Businesses

Economic uncertainty tops the list of turnover challenges, cited by 30% of trading businesses, stable from early January. Other key pressures include:

• Competition (21%)
• Cost of materials (20%)
• Cost of labour (18%, down 4 points from January)

Nearly three in ten (29%) report no challenges, roughly steady year-on-year. For larger firms (10+ employees), labour costs dominate at 36%, with 16% facing worker shortages, unchanged since October 2025.

Price Dynamics and Expectations

Expectations for price increases on goods or services sold have softened, with 17% of trading businesses forecasting rises in March, down 3 points from February but stable versus 2025.

In January 2026, 28% reported higher input prices versus December, the highest since April 2025, though this eased with business size. Businesses have consistently overestimated both turnover and price rises since April 2022, revealing underlying pessimism.

These trends follow seasonal patterns, with March expectations peaking after January dips, as firms navigate broader economic headwinds including UK-wide fiscal tightening.