Entrepreneurs across the UK see the latest economic growth forecasts as evidence the economy is merely “treading water”, rather than building meaningful momentum, according to advisers at Blick Rothenberg.

Malli Kini, a partner at the firm, said business owners he works with are already adjusting plans in response to the subdued outlook. “A 0.9 per cent growth forecast does not feel like momentum to entrepreneurs,” he said. “It feels like standing still. The people I advise are already making difficult decisions about hiring, investment and whether now is the right time to exit.”

The comments come after the Bank of England cut its forecast for UK economic growth in 2026 to 0.9 per cent, down from a previous estimate of 1.2 per cent. The downgrade followed figures from the Office for National Statistics showing the economy expanded by just 0.1 per cent in the final quarter of 2025.

Inflation has eased significantly from its peak of 11.1 per cent in October 2022, falling to 3 per cent in the year to January 2026, and the Bank expects it to return to its 2 per cent target in the coming months. Interest rates currently stand at 3.75 per cent.

Yet many businesses say falling inflation is not translating into meaningful relief in their accounts. Kini said rising employer National Insurance costs were weighing heavily on hiring decisions. For a company employing around 20 staff on average wages, the changes could add between £30,000 and £50,000 a year to costs.

“That’s not theoretical,” he said. “That’s the difference between taking on another employee or deciding not to.”

Other economic pressures may also complicate the outlook. Recent geopolitical tensions involving Iran have pushed up global oil prices, a factor not fully incorporated into the fiscal forecasts prepared by the Office for Budget Responsibility.

Meanwhile, the labour market has begun to soften. UK unemployment rose to 5.2 per cent in the three months to December 2025, the highest level in nearly five years, although wage growth remains above inflation, providing some support for household spending.

Kini said many employers are choosing caution rather than expansion. “Businesses that would normally be hiring are pausing because the combined cost of employment taxes and regulatory changes has made restraint the rational choice.”

Looking ahead, attention is turning to the government’s fiscal headroom ahead of the next Budget. The Office for Budget Responsibility previously estimated the Chancellor had £21.7bn of room against her fiscal rules. Should growth weaken further, that margin could narrow, increasing pressure for additional tax changes later in the year.

Kini warned entrepreneurs not to assume policy will remain stable. “The changes already in law on National Insurance, capital gains tax and employment rights are significant,” he said. “Use the coming months to review structures, succession plans and investment strategies. The businesses that navigate this period best will be the ones planning ahead rather than waiting for clarity.”