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Macro EconomyMedium•23 April 2026•

1 min read

UK Industrial Optimism Hits Pandemic Lows Amid Iran Conflict and Rising Costs

Key Facts

1Optimism about the business situation in the UK fell at the quickest pace since the onset of the Covid pandemic according to CBI data.

2Output price expectations jumped to +32 in April, representing the biggest one-month jump since CBI records began in 1975.

Optimism within the UK industrial sector has plummeted at its fastest rate since the onset of the Covid-19 pandemic, according to the latest CBI data. Output price expectations surged to +32 in April, marking the largest one-month jump since records began in 1975, driven by supply shocks linked to the Iran conflict. The index for output volume expectations for the next three months also saw a sharp decline, falling to -20 from -3 in the previous period. Analysts suggest that recent activity reflects 'frontloading' of orders as firms build safety stocks ahead of anticipated price hikes. These record-breaking price expectations and pandemic-level pessimism signal a heightened risk of stagflation for the UK economy. Consequently, industrial firms are reportedly cutting investment intentions in infrastructure and training amid the worsening macroeconomic outlook.