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UK business confidence fell to its lowest level in 17 months in September as companies reported concerns over higher energy costs, inflation and economic uncertainty, according to the latest Lloyds Business Barometer.

The headline confidence measure declined 12 points to 41%, from 53% in August, marking its lowest reading since April 2025. Despite the decline, confidence remained above the survey’s long-term average of 30%, although it was below the 12-month average of 47%.

The survey followed renewed tensions in the Middle East, which have contributed to higher energy costs and increased uncertainty over the economic outlook.

Economic Optimism Declines to 31%

Businesses’ confidence in the wider economy fell 18 points to 31%, compared with a 12-month average of 37%.

The proportion of companies expressing optimism about the economy declined to 52% from 64%, while the proportion reporting pessimism increased to 21% from 15%.

Businesses cited factors including energy prices, broader cost pressures, inflation and global uncertainty.

Companies’ expectations for their own trading performance also weakened. The measure declined eight points to 50%, below its 12-month average of 56%.

The proportion of businesses expecting higher output over the next 12 months fell nine points to 57%, while the share anticipating lower activity edged down to 7%.

Price Expectations Edge Higher

The proportion of companies expecting to increase prices during the next 12 months rose one percentage point to 52%, ending three consecutive months of declines.

Price expectations nevertheless remained below their levels from a year earlier, as companies balanced increased costs against competitive pressures.

Manufacturing and Services Confidence Falls

Confidence declined across most of the sectors covered by the survey.

Manufacturing recorded a 19-point decline to 36%, while services fell 21 points to 35%. Construction confidence decreased eight points to 47%.

Retail was the exception, with confidence increasing three points to 51%, supported by stronger customer demand and improved economic news.

Smaller Businesses Record Larger Decline

Confidence among companies with annual turnover below £5 million declined 14 points to 39%.

Businesses with turnover between £5 million and £25 million recorded a five-point decrease to 54%, while confidence among companies generating between £25 million and £100 million increased three points to 75%.

Domestic-focused businesses recorded a 12-point decline in confidence to 32%, while the measure for internationally active companies fell 10 points to 49%.

Confidence Falls Across Most UK Regions

Business confidence declined across 10 of Britain’s 12 regions and nations.

The South West recorded a 30-point decline to 25%, while confidence in the East Midlands fell 31 points to 20%. Wales recorded the lowest reading at 16%, following a 38-point decrease.

The West Midlands recorded a 22-point increase to 69%, while confidence in the North East rose five points to 50%.

The latest decline in overall business confidence was comparable with the fall recorded earlier in 2026 following the initial escalation of the Middle East conflict.

British Prime Minister Andy Burnham said the government could consider rejoining the European Union as part of a longer-term review of Britain’s relationship with the bloc.

Speaking to BBC Radio 4’s Today programme on Wednesday, Burnham said he wanted to examine “what is doable”, with potential options including maintaining the current arrangements, joining a customs union, pursuing a single-market relationship or going further and rejoining the EU.

Burnham previously supported Britain rejoining the EU within his lifetime, although he said this was “not necessarily” his position now.

Government to Examine UK-EU Options

Burnham’s comments mark a change from the position set out in Labour’s 2024 election manifesto, which pledged to “make Brexit work” and ruled out rejoining the EU customs union or single market.

At the Labour Party conference on Tuesday, Burnham said the current relationship with the EU was “not good enough” and linked Brexit to difficulties surrounding immigration and the economy.

He plans to use a delayed EU summit later this year to set out different options for Britain’s future relationship with the bloc and seek consensus on a longer-term approach.

Burnham’s Position on Brexit Develops

During his campaign in the Makerfield by-election, Burnham pledged not to reopen the Brexit debate and said he was not proposing that Britain consider rejoining the EU.

Last week, however, he left open the possibility of seeking a mandate at the next general election to rejoin the bloc.

The government has not announced a policy to seek EU membership, with Burnham instead presenting rejoining as one of several possible longer-term arrangements to be considered.

Previous Government Pursued Limited EU Reset

Former prime minister Keir Starmer pursued closer cooperation with Brussels while stopping short of seeking membership of the single market or customs union.

Measures under that approach included closer alignment on food standards, a youth mobility agreement and reconnecting British industry with the EU’s carbon trading system.

The EU summit, which was delayed following Starmer’s departure, is expected to provide an opportunity for Burnham to outline his proposals for the future relationship.

Burnham has also said he intends to publish a 10-year plan for the British economy.

Conservatives Criticise Burnham’s Comments

Conservative deputy leader Alex Burghart criticised Burnham’s position, arguing that Labour should not attribute current economic problems to the Brexit vote, which took place more than a decade ago.

The Conservatives also accused Labour of reopening political divisions over Britain’s departure from the EU.

Chariot (LSE:CHAR) reported progress in repositioning its portfolio towards upstream oil and gas operations during the first half of 2026, including two financing transactions providing economic exposure to producing offshore assets in Angola.

The AIM-listed energy company is working alongside Etu Energias, BW Energy and Shell Trading in connection with interests in Angola’s Blocks 14 and 14K.

Chariot said the arrangements are expected to provide cash flows linked to approximately 8,000 barrels per day of current oil production.

The company estimates an indicative net asset value of more than $200 million for its economic exposure to the assets based on an oil price of $60 per barrel. This figure represents a company estimate rather than a realised valuation.

Chariot Raises $24.3 Million

Chariot raised $24.3 million to support its strategy and the transactions associated with the Angolan assets.

The company is increasing its focus on upstream operations that are expected to generate cash while continuing work across other parts of its African energy portfolio.

Chariot also appointed a new chief operating officer as part of changes to its operational leadership during the period.

Renewables Business Sale Progresses

The company is progressing the proposed sale of its renewable energy business as it changes the composition of its portfolio.

Meanwhile, Etana Energy is continuing to develop its electricity trading platform in South Africa alongside related power generation projects.

Chariot also retains activities in green hydrogen and solar energy projects in Africa.

Moroccan Gas Activities Continue

Alongside its expansion in Angola, Chariot continues to progress its gas interests in Morocco.

The company holds offshore licences in the country as part of its upstream portfolio.

Chariot is an Africa-focused energy company with activities spanning upstream oil and gas, electricity trading and renewable and green hydrogen projects. Its current strategy is increasingly focused on upstream operations, including its new economic exposure to producing oil assets in Angola.

Eco Buildings Group (LSE:ECOB) reported unaudited revenue of €1.2 million for the six months ended 30 June 2026, down from €1.8 million a year earlier, as the construction technology company continued investment in manufacturing capacity and international projects.

The group recorded a loss of €0.94 million, which widened from the prior-year period. Eco Buildings attributed the change to the timing of revenue recognition and higher finance costs.

The company said its order book and project pipeline continued to expand during the period.

Eco Buildings Invests £2.35 Million in Durrës Production Line

Eco Buildings is investing £2.35 million in a second-generation manufacturing line in Durrës, Albania, incorporating artificial intelligence technology.

The company intends to use the facility as a model for manufacturing lines that could subsequently be replicated in other international markets.

Eco Buildings is also progressing its Rolling Hills apartment development in Albania. The project covers at least six residential blocks and has a potential value of up to €13.2 million.

Indonesia and Senegal Ventures Advance

The group also reported progress on expansion initiatives in Southeast Asia and West Africa.

In Indonesia, Eco Buildings is participating in a manufacturing venture supported by US$5 million of funding from its partner.

In Senegal, the company is progressing a joint venture backed by €1.75 million. A demonstration hospital project has also been used to demonstrate the company’s modular construction system for social infrastructure applications.

Gambia Agreement Covers Minimum 10,000 Homes

Following the end of the reporting period, Eco Buildings signed a Strategic Investment Framework Agreement with The Gambia and Lumen Holdings.

The agreement covers a programme for a minimum of 10,000 homes and plans to establish a West African headquarters and an AI-powered Centre of Excellence.

Separately, the company reported delays to an initiative in Sudan amid political risks affecting the project.

Eco Buildings Expands Modular Construction Operations

Eco Buildings develops prefabricated glass fibre reinforced gypsum, or GFRG, modular wall systems for residential and infrastructure construction.

The AIM-listed company is headquartered in Albania and is developing manufacturing and project partnerships in markets including West Africa and Southeast Asia.

Its expansion model includes joint ventures and locally based manufacturing operations, with partners providing funding for certain projects.

Novacyt (LSE:NCYT) reported an 18% increase in unaudited group revenue to £11.6 million for the first half of 2026, supported by growth across its regions and a contribution from its acquisition of Southern Cross Diagnostics.

Underlying revenue, excluding the acquisition contribution, increased by approximately 9%. The molecular diagnostics group reported growth across all geographic regions, with demand for instrumentation and clinical reproductive health products contributing to the performance.

Southern Cross Diagnostics, the Australian distributor acquired by Novacyt, contributed £1.8 million of revenue during the period.

Southern Cross Acquisition Affects Gross Margin

Novacyt said the addition of Southern Cross Diagnostics reduced the group’s overall gross margin because of the distributor’s different margin profile.

The company completed the integration of Southern Cross during the period, expanding its operations in the Asia-Pacific region.

Novacyt also reduced operating expenses through cost-saving measures, contributing to a narrower EBITDA loss.

Cash declined to £8.9 million, and the company undertook a small rights issue during the period.

Restructuring Targets £4 Million in Annual Savings

Novacyt is implementing a restructuring programme targeting approximately £4 million of annual cost savings.

The company said initiatives representing up to £3.4 million of those targeted savings have already been identified.

The programme forms part of measures to reduce the group’s operating cost base alongside its product development and geographic expansion activities.

Novacyt Launches DPYD Assay and Signs Illumina Collaboration

During the first half, Novacyt launched its IVDR-certified Yourgene Insight DPYD assay in Europe, expanding its precision oncology product range.

The group also entered into a five-year collaboration with Illumina.

Novacyt develops and commercialises molecular diagnostics products, including assays, instrumentation and diagnostic workflows. Its activities cover clinical diagnostics, instrumentation and research-use-only products across areas including reproductive health, precision medicine and infectious diseases.

Water Intelligence (LSE:WATR) reported a 7% increase in revenue for the first half of 2026 and launched a preventive maintenance business combining water monitoring technology with its existing leak detection and repair services.

Revenue increased to $48.2 million for the period, while adjusted EBITDA rose 6% to $9.8 million.

The company said growth was supported by corporate and franchise-related sales, with international corporate revenue increasing 40%.

Statutory profit before tax declined 22%, reflecting higher investment and costs during the period, while margins decreased slightly.

Net Debt to Adjusted EBITDA Stands at 1.29

Water Intelligence reported a net debt to adjusted EBITDA ratio of 1.29 and said its balance sheet provides capacity to continue pursuing acquisitions.

The group also continued its share buyback programme during the period.

Water Intelligence operates through a combination of corporate-owned operations and franchises, with its American Leak Detection business providing leak detection and remediation services across the U.S.

Preventive Maintenance Business Launched

Alongside its interim results, Water Intelligence formally launched a preventive maintenance operation based on its technology-enabled services platform.

The new business follows paid pilot programmes with large customers and combines wireless water monitoring devices with data-based subscription aftercare services.

The offering also incorporates Water Intelligence’s installation, leak detection and response capabilities to provide monitoring and repair services through a single platform.

Insurance Channels Form Part of New Service Model

Water Intelligence plans to use its existing U.S. insurance relationships and direct workforce to support the rollout of its preventive maintenance services.

The company said the model is designed to provide customers with water monitoring, leak identification and subsequent repair services.

Water Intelligence provides leak detection and remediation services for potable and non-potable water systems, serving residential, commercial and municipal customers.

Its operations include American Leak Detection in the U.S. alongside its international activities.