The percentage of London small businesses predicting growth for final three months of 2025 (36%) has fallen to its lowest level since Q1 2021 (34%) – with 86% of small business owners in the Capital saying they fear the possibility of Autumn Budget announcements that could negatively impact their growth outlook and finances.

The findings are from the Business Barometer study by Novuna Business Finance, which has been tracking small business growth forecasts every Quarter since 2015. The latest study asked small business owners about their growth forecasts for the final three-months of 2025, going into the Christmas trading period (1 October to 31 December 2025).

Percentage of London-based small businesses predicting growth over time
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Q3 2025
Q4 2025
44%
43%
49%
57%
39%
48%
37%
36%

Nationally, and for the first time, in every industry sector the percentage of enterprises predicting growth is down on the start of the year
· Growth forecasts in construction (17%) are at their lowest point since Q2 2024.
· In retail, there are no signs of the Christmas countdown boost to business confidence of recent years. For 2025, the percentage of small business owners predicting growth is flat on the summer months, and significantly down on the start of the year (25% Vs 33% in Q1 2025).
· The hospitality and leisure sector sees the percentage of small businesses predicting growth (23%) fall to its lowest level since Q1 2021.
· The percentage of business owners predicting growth in the agriculture sector has halved since the start of the year (falling from 40% to 19%) – and now stands at its lowest level since Q4 2022.
· Despite the extremely challenging market conditions, growth forecasts in the manufacturing sector remain relatively flat on Q3 (25%) and are down only slightly on the start of 2025 (27%).

Percentage of small businesses predicting growth by industry sector:
Start and end of year comparisons

Start of the year
Q1 2025
End of the year
Q4 2025
Finance & accounting
47%
35%
Medical services
35%
32%
Education
28%
27%
Transport & distribution
29%
26%
Media & marketing
47%
26%
Manufacturing
27%
25%
Retail
33%
25%
Hospitality & leisure
25%
23%
Property & real estate
28%
23%
Agriculture
40%
19%
Construction
26%
17%
Legal services
43%
16%

Jo Morris, Head of Insight at Novuna Business Finance comments: “Following last summer’s General Election bounce, the percentage of UK small businesses predicting growth has fallen from 35% to 25% over the last 12-months. 2025 is the first time in five years that the percentage of small businesses predicting growth has fallen below 30% – and the new figures for Q4 2025 represent the lowest point for growth predictions since the outbreak of the Covid Pandemic in spring 2020. The percentage of small businesses in London predicting growth is higher than the national average, but it always has been. The slide in confidence within the Capital is a concern for the country at large.”

“There are various factors at play. Market uncertainty is something small businesses do not like, US tariffs have been a cause of concern through 2025 and, for many small businesses, the long tail of Brexit still impacts business confidence – with fewer small businesses today looking to open up trading opportunities in EU markets. The looming Autumn Budget is also a concern for many, as there has been a lot of speculation about possible tax rises. At Novuna Business Finance we remain committed to helping established small businesses to secure funding to power future growth – but the message from small business owners seems to be very clear: they need a context of certainty to plan against and a tax framework that incentivises growth, expansion and investing in new staff. We need to see a reversal of the fall in small business growth forecasts we have seen over four consecutive quarters – and all eyes will be on the Autumn Budget for the stimulation package that many small business owners are crying out for. If we want to see growth in the economy, the forthcoming Budget needs to be a ‘Budget for business.’”