UK companies stay broadly assured in Britain as a base for progress, at the same time as rising prices and financial uncertainty weigh on margins, in response to new analysis from Barclays.
The financial institution’s newest Enterprise Prosperity Index, analysing anonymised knowledge from round a million purchasers alongside a survey of 1,000 enterprise leaders, reveals a two-speed economic system rising on the finish of 2025. Bigger corporations are pushing forward with long-term borrowing and funding, whereas smaller corporations are turning to short-term liquidity to handle tighter margins.
Regardless of ongoing challenges, 58 per cent of enterprise leaders mentioned the UK stays the most effective place to start out, scale and develop a enterprise. The same proportion, 57 per cent, imagine Britain is turning into a extra enticing place to listing, with London cited as the popular marketplace for a future float by 46 per cent of respondents.
Nearly all corporations surveyed (93 per cent) reported greater buying and selling prices over the previous yr, pushed primarily by power (85 per cent), labour (80 per cent) and provide chain bills (78 per cent).
In response, 80 per cent have handed a few of these will increase on to prospects, with companies transferring a mean of 30 per cent of upper prices. An extra 65 per cent anticipate to boost costs once more this yr.
Vitality pressures stay significantly acute, with 34 per cent of corporations lowering consumption to offset rising payments. Greater than a 3rd (37 per cent) view slicing working prices as the simplest approach to unlock funding in 2026.
Barclays’ shopper knowledge present money inflows slipped 3.4 per cent year-on-year within the fourth quarter, signalling subdued spending. Nevertheless, borrowing patterns differ sharply by firm dimension.
Bigger corporations elevated long-term borrowing by 8.7 per cent in contrast with a yr earlier, suggesting confidence in future growth. In contrast, smaller companies decreased longer-term lending whereas rising overdraft utilization by 2.5 per cent, reflecting short-term money move pressures.
Two-thirds of enormous companies and over half of medium-sized corporations imagine present financial circumstances help long-term progress, in contrast with simply 12 per cent of micro companies.
Confidence in particular person firm prospects stays comparatively sturdy, with 86 per cent of small enterprise leaders upbeat in regards to the yr forward, though that determine drops to 68 per cent amongst micro corporations.
Towards this backdrop, Barclays has launched its 2026 Enterprise Prosperity Fund, committing £22bn in lending to help new funding and refinancing amongst enterprise and company purchasers.
Abdul Qureshi, managing director of Barclays Enterprise Banking, mentioned smaller corporations have been understandably cautious however nonetheless noticed alternative. “There may be clearly extra to be performed to assist flip confidence into tangible progress,” he mentioned.
Matt Hammerstein, chief govt of Barclays UK Company Financial institution, added: “Even in a interval marked by value strain, companies present clear perception within the UK as a spot to develop. Our position is to assist bridge the hole between ambition and motion.”
The findings recommend that whereas the macroeconomic backdrop stays unsure, company sentiment in direction of the UK’s long-term prospects is holding agency — with entry to capital, market repute and investor depth cited as key benefits.
For policymakers and lenders alike, the problem now’s making certain that resilience amongst bigger corporations interprets into renewed momentum for smaller enterprises, the place warning remains to be tempering growth plans.
