New research from Grant Thornton UK LLP’s latest Business Outlook Tracker* shows a significant recent uplift in business optimism, with an increasing number of mid-sized businesses in the East of England responding proactively to rising employment costs with strategic planning.

In December last year, shortly after the Autumn Budget announcement, 48% of businesses said they planned to reduce or freeze hiring in the next six months - that figure has now increased to 69%.

Similarly, more businesses have now formed plans to pass these rising employment costs on to customers (up to 76% from 54% in December). Employees of mid-market businesses are also more likely to be impacted by business leaders’ plans to offer reduced or no pay increases and bonuses, as well as reviewing their employee benefits offering.

Despite these challenging decisions, the research, which offers a rolling indicator of mid-market business sentiment, shows optimism throughout the business community. A striking 78% of mid-sized firms in the East of England express optimism about their revenue growth prospects over the next half-year

The research highlights that the East business ecosystem is demonstrating remarkable resilience, with over 93% of business leaders expecting profit increases over the next six months, up from 58% in December 2024.

By contrast, larger corporates across the UK are now less optimistic about both their own fortunes and those of the wider UK economy, as the Business Outlook Tracker recorded a drop in confidence from the 200 larger businesses also surveyed:

-10pp decrease in their optimism about the outlook of the UK economy
-3pp decrease in their optimism about their funding position and their revenue growth
-2pp decrease in those expecting their profits to increase

Charlotte Anderson, Practice Lead for Grant Thornton UK LLP in Cambridge, Milton Keynes, and Chelmsford, said:

"Beyond the numbers, what we're seeing across the East of England is the remarkable adaptability that makes our region such a vibrant business hub. Local business leaders are making tough but necessary decisions today that will protect their growth trajectory tomorrow.

"The diverse economic landscape, from science and healthcare to financial services, gives our mid-sized firms a distinct advantage in terms of agility compared to larger corporations that may be more exposed to international volatility. Many companies have already weathered challenging economic conditions and are now emerging stronger and more confident about future prospects.

"This positive sentiment isn't just reflected in spreadsheets – it's evident in conversations we're having with business leaders across the region, who are actively investing in their future despite cost pressures. As we approach the Spring Statement, businesses in the East of England will be watching closely, but the practical, can-do attitude demonstrated by our region's mid-market suggests they're well-positioned to navigate whatever challenges lie ahead."