Business Sentiment Remains Under Strain Amid Persistent Cost Pressures and Global Uncertainty, Q2 Survey Reveals

July 3, 2025

Business sentiment across Cambridgeshire, Peterborough and Stamford continues to face considerable challenges, according to the latest Quarterly Economic Survey (QES) for Q2 2025, conducted by the British Chambers of Commerce.

The Q2 2025 report, which gathered over 120 responses across diverse sectors (68% from services and 32% from manufacturing), paints a sobering but essential snapshot of a business landscape shaped by persistent cost pressures, labour shortages, and growing global uncertainty. Data for this report was collected between 9 May and 9 June 2025.

Key findings from the Q2 2025 report include:

• Labour costs remain the dominant price pressure, intensified by the rise in employer National Insurance contributions and the increase in the national living wage
• 67% of companies faced difficulties hiring for skilled manual or technical positions, up from 53% in the previous quarter
• Sales figures paint a mixed picture: while 23% saw an increase in UK sales, overseas sales decreased for 35% of businesses
• A notable 25% saw export growth, suggesting targeted international opportunities still exist despite the overall mixed sales performance.

These findings land at a critical moment. The Autumn Budget has left a lasting dent in business confidence, and international developments – including the announcement of new trade tariffs by President Trump – threaten to deepen existing economic turbulence. The Office for Budget Responsibility has warned that a full trade war could shave 0.6 per cent off UK GDP growth in 2025 alone.

Despite these headwinds, businesses across our region continue to demonstrate resilience and a willingness to adapt. However, the path forward necessitates meaningful Government action to reduce cost burdens, ease recruitment challenges, and unlock investment. Without such intervention, UK growth will remain elusive.

Charlotte Horobin, Chief Executive Officer of Cambridgeshire Chambers of Commerce, added: “Government must take action to alleviate the tax burden on business and nurture an environment that inspires confidence and much needed investment.”

Shevaun Haviland, Director General of the British Chambers of Commerce, commented: “Businesses are clear – they want their costs reduced, regulation reformed, and skills barriers removed. Action by policymakers now will help businesses out of this confidence slump and give firms the tools to boost growth.”

Hear more about the QES Report: Quarter 2 2025 QES Report

To further understand the implications of the Q2 2025 Quarterly Economic Survey results and engage in discussions about the local economic landscape, businesses are invited to join us at our upcoming Peterborough Business Forum.

Event: Peterborough Business Forum

Date: Tuesday 22 July, 8.30-10.30am

How to book: Please email events@cambscci.co.uk

We encourage all local businesses to attend this forum to engage directly with key stakeholders and ensure their voices are heard as part of the wider regional development conversation.