The outlook for British business isn't as bad as you might think

From low growth to soaring debt, many reports have painted a gloomy economic picture for next year. Richard Lambert takes a closer look at ten misconceptions

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The UK economy is going to hell in a handcart

Opinion polls suggest that nearly two-thirds of the public expect things to be in a worse state in 12 months’ time. For sure, it’s not going to be a great year, but most economists still think GDP will actually rise at roughly the same rate as it has done in 2025 - by something like 1.5%.

The business sector is shrouded in deep gloom

The Institute of Directors’ business confidence index is close to its all-time low. However, the S&P PMI composite output index, which measures activity in services and manufacturing, has expanded briskly in December to above 50, suggesting things are ticking along nicely.

The UK has gone back to the 70s as the sick man of Europe

So say the pessimists. But when PWC polled its global CEOs, the UK emerged as the second most attractive place to invest in the world, behind the US but ahead of Germany, China and India.

The UK is crushingly overtaxed

It’s true that the tax take as a share of the economy is heading towards its highest level since the 40s — near to 34.4% — but that is pretty much in line with the other rich members of the OECD, and below most other European countries.

People who can afford to leave the country are doing so