Scottish business confidence drops 15 points in December, despite UK rise

Business confidence has fallen in Scotland – despite rising across the UK, a report has found.

The latest business barometer from the Bank of Scotland showed business confidence north of the border fell by 15 points in December, dropping to to 36%.

The research found companies in Scotland reporting lower confidence in their own firm’s prospects, with this falling 24 points to 38%.

Optimism in the economy as a whole from Scottish firms was also down seven points to 34%, giving the overall confidence rating of 36% – compared to 51% in November.

It comes as business confidence across the UK grew by five points in December to stand at 47%.

The research, which involved some 1,200 companies – including 79 businesses in Scotland – found that UK wide firms’ confidence in their own trading prospects dropped by one point to 52%.

However, their optimism in the wider economy increased by 11 points, rising to 42%.

According to the research, London and the West Midlands were the joint most confident parts of the UK in December  – both with levels of 63% – followed by the East Midlands on 56%.

Martyn Kendrick, regional director for Scotland at the Bank of Scotland, said the country’s businesses had continued to “showcase real resilience” over the year, and were now “setting out plans for growth in the new year ahead”.

He added: “We’ll be right alongside them, up and down the country, so that they can make the most of new opportunities as they arise.”

Meanwhile, Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said across the UK it was “great to see business confidence ending the year on a higher note, up 10 points from the start of the year”.

The economist added: “The uplift in business confidence is driven by an 11-point increase in optimism in the wider economy, increasing to a four-month high.

“Confidence changed most in the construction sector which saw a big boost in December, to the highest level this year.”

Business minister Richard Lochhead said: “We recognise the challenges facing Scottish businesses and are working closely with companies to pursue investment, build export potential and capitalise on Scottish innovation.

“Scotland’s economic performance has remained resilient through 2025 with key metrics in line with the UK overall. Recent figures show Scotland’s onshore GDP grew in the three months to October despite falling across the UK.

“However, we lack the full economic powers needed to address the issues facing Scotland’s economy.”