Three quarters of UK firms impacted by Middle East conflict but confidence in own prospects remains resilient

Barclays Business Prosperity research among over 500 UK business leaders assessing the impact of the Middle East conflict shows:

• 66 per cent of businesses say they are already experiencing pressures from fuel and energy prices, while 50 per cent report moderate or significant supply chain disruptions
• 37 per cent have taken steps to reduce energy usage or improve efficiency in response, and 32 per cent have adjusted pricing
• Despite the challenges, confidence in firms’ own business (78 per cent) and the outlook for their sector (74 per cent) remains relatively resilient

Rising energy costs, supply chain disruption and ongoing geopolitical uncertainty linked to the Middle East conflict are already impacting the majority of UK businesses. Two thirds (66 per cent) report experiencing energy and fuel cost pressures, while shipping and logistics costs (43 per cent) are also weighing on margins.

According to the latest Barclays Business Prosperity research, in response, UK firms are already taking action to mitigate the operational impact of geopolitical instability. Almost four in 10 (37 per cent) are cutting energy use or improving supply‑chain efficiency, while 32 per cent have adjusted pricing to offset rising costs.

Others are cutting discretionary spending or wider operational costs (29 per cent), with more firms expecting to take similar action over the next six months (38 per cent), and a third (34 per cent) are planning to pass rising costs on to customers.

Cash buffers and financial support become increasingly important for firms

As firms adapt to geopolitical shocks, access to finance is playing a central role in supporting business resilience. Support with managing cash flow (41 per cent) and access to working capital or short-term credit (39 per cent) are becoming increasingly important.

The majority (83 per cent) see existing cash savings as important to navigate the geopolitical disruption, with working capital support (78 per cent), international trade finance (68 per cent) and cross border payments solutions (67 per cent) all seen as key sources of support.

Cost pressures have already started to feed through to consumer behaviour. Barclays Consumer Spend data shows fuel spending rose by 10.9 per cent year-on-year at the start of the conflict ¹, reflecting rising prices and increased demand, while spending on holidays and travel fell by 7.9 per cent in in mid-March as households take a more cautious approach to their outgoings.

Abdul Qureshi, Head of Business Banking at Barclays, said: “UK businesses are facing a convergence of pressures, with multiple challenges hitting at once. The impact is being felt most acutely by firms exposed to high energy costs, disrupted supply chains and international trade, and is compounded by a prolonged period of uncertainty ahead.

“For SMEs, this means dependable cash flow and access to working capital are increasingly important – not only to keep operations running, but to help safeguard future growth plans.

“Through our £22bn Barclays Business Prosperity Fund and sector specialists across the country, we’re here to provide businesses with support to navigate this uncertainty.”

Confidence stronger at firm level than macro expectations

Despite these challenges, confidence in firms’ own prospects (78 per cent) and the outlook for their sector (74 per cent) remains relatively resilient.

Confidence in the UK (49 per cent), global (45 per cent), and European (54 per cent) economies is markedly weaker however, pointing to a clear divergence between business level confidence and the macroeconomic environment.

While business leaders expect geopolitical uncertainty linked to the conflict to restrict investment and growth plans over the next 12 months (80 per cent), they anticipate only a slight or moderate impact (69 per cent), with just 11 per cent reporting a significant constraint on plans.

Matt Hammerstein, CEO of Barclays UK Corporate Bank: “Our data shows most business leaders expect the impact of the Middle East conflict to continue into the year ahead, meaning firms are having to manage immediate pressures while still planning for future growth.

“In an environment of ongoing uncertainty, resilience and flexibility matter more than ever. Access to working capital, trade finance and cross border payment solutions can make a real difference – helping firms manage disruption today while remaining ready to invest and grow when conditions improve.”

Barclays £22bn Business Prosperity Fund is available for new and existing Business Banking customers and UK Corporate Banking clients across the UK, providing lending and refinancing support for new and existing projects.

ENDS

Notes

This research is conducted as part of Barclays Business Prosperity Index. The survey data was conducted among 525 business decision makers, between 27 ^th March – 31 ^st March 2026 by Focaldata on behalf of Barclays.

The businesses represented in the survey include micros (1-9 employees), small businesses (10-49 employees), medium businesses (50-249 employees), and large businesses (250+ employees) across sectors and regions of the UK.

For more information go to: home.barclays/businessprosperity

Barclays Business Prosperity Fund

The Barclays Business Prosperity Fund is available for new and existing Business Banking customers and UK Corporate Banking clients across the UK, providing lending and refinancing support for new and existing projects.

£22bn is the total amount of lending Barclays has available to support business growth among Business Banking and UK Corporate Banking clients in 2026, subject to normal lending assessment, status and application. Terms and conditions apply.

¹Barclays Spend Insights

Barclays Spend Insights helps businesses spot growth opportunities, respond to changing customer behaviours, and stay ahead of market trends, with intelligence segmented by region and customer demographics. For further information, visit our solutions site.

Barclays Consumer Spend data on fuel spending is from week commencing 28 February, holiday data is from the week commencing 14 March.

About Barclays

Our vision is to be the UK-centred leader in global finance. We are a diversified bank with comprehensive UK consumer, corporate and wealth and private banking franchises, a leading investment bank and a strong, specialist US consumer bank. Through these five divisions, we are working together for a better financial future for our customers, clients and communities. For further information about Barclays, please visit our website home.barclays