UK firms expect further fall in private-sector activity through end of 2026

The CBI Growth Indicator puts the expected activity balance at -14 per cent for the three months to December 2026, extending a run of negative business sentiment that dates back to late 2024.

A weighted balance of -14 per cent of private-sector firms expect activity to fall in the three months to December 2026, according to the Confederation of British Industry’s latest Growth Indicator — and that pessimism has not lifted since late 2024. The figures show a sector already recording a -19 per cent activity balance for the three months to September 2026, meaning the expected improvement heading into the final quarter is modest at best.

Distribution is the hardest-hit sector in the forward-looking data, with an expected activity balance of -34 per cent. Consumer services recorded -12 per cent and business and professional services -10 per cent. The September decline was concentrated in services and distribution; manufacturing output fell only slightly by comparison.

That -19 per cent September reading is itself an improvement on what firms had feared. Back in June 2026, businesses expected a -28 per cent fall in the three months to September — so the outturn, while still negative, came in less bad than anticipated.

The CBI’s own early September Growth Indicator had put the forward-looking balance at -11 per cent; the latest reading of -14 per cent is slightly weaker than that. The CBI is clear that its survey measures business sentiment and activity balances, not UK GDP directly.

And official data tells a different story on output. The Office for National Statistics recorded real GDP growth of 0.4 per cent in the three months to June 2026, a figure the Bank of England confirmed for the second quarter. The Bank noted, though, that business surveys continued to point to weaker momentum — which is broadly what the CBI data reflects.

HM Treasury’s September 2026 compilation of independent forecasts put average UK GDP growth expectations at 1.2 per cent for the full year, suggesting that annual growth remained positive in most outside forecasters’ models even as short-term business sentiment stayed subdued. The Bank of England’s rate stood at 3.75 per cent after its September 2026 Monetary Policy Committee decision.