More UK businesses are expecting a drop in turnover next month, in a fresh sign that the corporate sector remains cautious despite a more stable inflation outlook. The Office for National Statistics said around 14% of trading businesses expected turnover to decrease in June 2026, a level it described as broadly stable but still indicative of weakness in demand conditions.

The survey, published on 21 May, is one of the clearest recent snapshots of business sentiment in the UK economy. While the ONS said the measure had been broadly steady, the fact that around one in seven firms expects a fall in sales suggests many companies are still struggling to plan with confidence.

Why it matters

The data is significant because turnover expectations are often a useful early signal of hiring, investment and pricing decisions. If businesses anticipate weaker sales, they are more likely to hold back on expansion, delay spending and remain defensive on costs.

That caution matters for an economy that has shown modest growth but remains vulnerable to uneven demand across sectors. It also adds to the pressure on policymakers, who are trying to support activity without reigniting inflation.

Mixed signals for the outlook

The latest business survey comes against a backdrop of gradually easing pay growth and a more settled inflation environment, which could eventually help support real incomes and spending. But for now, the ONS figures suggest the private sector has yet to feel a decisive lift in confidence.

Businesses have been reporting a range of pressures, including softer demand, financing costs and uncertainty about future orders. The overall picture is one of an economy that is not in crisis, but is still short of momentum.

• About 14% of trading businesses expected turnover to fall in June 2026.
• The ONS said the reading was broadly stable, but still points to weak sentiment.
• The survey suggests many firms remain cautious about hiring and investment.

For ministers, the message is unwelcome: even if the worst of the inflation shock has passed, businesses are not yet seeing enough improvement to turn more optimistic. For company leaders, the survey reinforces the need for careful cost control and conservative planning in the months ahead.