\n UK business confidence split. <\/p>\n
Credit: PublicDomainPictures, Pixabay <\/p>\n
Over in Dublin, Bank of England Governor Andrew Bailey took to the podium recently with some plain-speaking on the Brexit aftermath. While he stopped short of saying Brexit was a mistake, he didn\u2019t hold back on the economic hangover.<\/strong><\/p>\n \u201cBrexit has weighed on UK growth and productivity,\u201d he admitted, calling for deeper ties with the EU to soften the blow, particularly in the world of financial services.<\/p>\n \u201cThere is merit in seeking to increase the openness of our financial markets by reducing non-tariff barriers,\u201d Bailey said. Translation: less red tape, more trade.<\/p>\n Most Read on Euro Weekly News<\/p>\n The BoE boss backed Starmer\u2019s new reset agreement, echoing Chancellor Rachel Reeves\u2019 push for alignment in \u201cmature industries\u201d like chemicals. He also floated ideas for closer regulatory harmony in areas like money market funds \u2014 a quiet nod to the shared benefits of cooperation, not confrontation.<\/p>\n Can increased UK defence spending boost the economy?<\/p>\n Chancellor Rachel Reeves is betting big on bombs to boost Britain\u2019s bottom line\u2014vowing to transform the UK into a \u201cdefence industrial superpower\u201d by funnelling billions into homegrown drones, AI weaponry and tech-savvy start-ups.<\/p>\n With plans to ramp up defence spending to 2.5% of GDP by 2027\u2014and possibly 3% by 2030\u2014Reeves is swapping bean-counting for bomb-building in a bold bid to turn bullets into business.<\/p>\n But while Europe flirts with \u201cmilitary Keynesianism\u201d, critics warn Britain may be stuck in a fiscal crossfire\u2014cutting other investments while half our kit is still bought from abroad.<\/p>\n The payoff? If targeted right, defence spending could fuel a tech boom with economic returns up to double the investment. If not, we\u2019ll just be shelling out\u2014while American arms firms laugh all the way to the bank.<\/p>\n UK business confidence split: IoD optimism clashes with CBI warnings<\/p>\n It\u2019s a tale of two forecasts\u2014and the glass is either half full or leaking badly, depending on who you ask. The Institute of Directors (IoD)<\/a> is raising a cautious toast to recovery, reporting the sharpest leap in business confidence since August 2024, with its optimism index climbing from -51 to -35 in May.<\/p>\n Meanwhile, the Confederation of British Industry (CBI)<\/a> is sounding the alarm, finding \u201clittle sign of summer cheer\u201d as expectations across services, distribution and manufacturing sectors nosedive to levels not seen since 2022.<\/p>\n While the IoD highlights rising export, revenue, and wage expectations, the CBI warns that weak demand and surging employer costs are fuelling pessimism.<\/p>\n Both agree on the culprits\u2014geopolitical jitters, cybersecurity fears, and global slowdown\u2014but their tone couldn\u2019t be more different. One sees green shoots in defence, energy and EU ties; the other sees withering demand and businesses bracing for impact.<\/p>\n With the Spending Review looming, all eyes are on Westminster to stop the drift\u2014or risk watching UK plc stall just as it was warming up.<\/p>\n