Trading businesses in the UK showed signs of modest resilience in early January 2026, with 94% reporting active operations82% fully trading and 13% partially soper the latest Business Insights and Conditions Survey (BICS) from the Office for National Statistics (ONS). Only 4% paused trading temporarily, and 2% ceased permanently, indicating limited disruption despite ongoing pressures.

Turnover Expectations Signal Cautious Outlook

Nearly one in five (20%) trading businesses anticipate a turnover decrease in February 2026, a 5 percentage point drop from January expectations and matching levels from February 2025. Conversely, 16% expect an increase, up 3 points from January and stable year-on-year, with larger firms (100-249 employees) most optimistic at 28%.

Persistent Challenges Led by Economic Uncertainty

Economic uncertainty impacted 31% of trading businesses' turnover, down 2 points from early December 2025 and the dominant issue since October 2022. Other key hurdles included cost of labour (22%), materials (20%), and competition (19%), all stable month-on-month. Nearly 29% reported no challenges, consistent with recent trends.

• Labour costs topped factors for potential price hikes at 29%.
• Energy (20%) and raw materials (20%) followed, with finance costs at 17%.
• 41% plan no price increases in February.

Price Dynamics Remain Stable

Over a quarter (26%) of businesses saw rises in input prices in December 2025 versus November, steady overall but highest in accommodation and food services at 48%. Expectations for selling price increases dipped to 21% for February, aligning with prior years after a December spike.

For larger businesses (10+ employees), labour costs emerged as the primary challenge at 36%. These findings, captured in early January, underscore a business environment adapting to persistent but slightly softening headwinds, as economic uncertainty eases marginally.