Business confidence in the UK has risen sharply, giving the new Andy Burnham government an early boost as companies prepare for a crucial autumn Budget.

The latest Barclays business confidence index shows confidence rising to 63% in the second quarter of 2026, up from 57% in the previous quarter. The improvement has been linked to reduced political uncertainty and expectations surrounding the government's regional devolution plans.

Investment intentions have also strengthened, with 56% of businesses planning to increase capital spending on areas including staff development, research and development and equipment.

The stronger sentiment comes despite concerns about the UK's fiscal position and the possibility of future tax increases. Business leaders are watching closely as the government prepares for its 28 October Budget.

Burnham has also promised to reduce pressure on businesses and has highlighted closer economic ties with the EU, improved electricity-grid connections and regional economic development as priorities.

The key test now is whether stronger business confidence can translate into sustained investment, productivity and job creation.