UK businesses welcome political reset but seek greater policy certainty

• Confidence in the UK economy has risen to 63 per cent, up from 57 per cent in Q1
• Business optimism in their own prosperity is also up 3 percentage points to 86 per cent
• 60 per cent believe devolution will improve economic opportunities and over a third think No.10 North will benefit their business
• 56 per cent plan to increase investment in the next year, with 46 per cent likely to take out new finance, as Barclays data shows larger firms increased borrowing in Q2
• However, businesses call for clearer policy direction on tax, digital infrastructure and skills to turn confidence into growth

Barclays’ Q2 2026 Business Prosperity Index ¹ reveals that business confidence has rebounded following changes in the Government, with firms planning to increase investment and welcoming greater regional decision-making.

In a quarter that saw a shifting political landscape, Barclays’ anonymised client data from over 900,000 UK businesses, comparing Q2 2026 ¹ to Q2 2025, shows:

• SMEs within Barclays Business Banking increased savings by 1.5 per cent, while the number of loans rose by 0.9 per cent.
  
  
• Barclays UK Corporate Bank clients, made up of larger firms, increased longer-term borrowing to a greater extent. The number of loans was up 3.2 per cent and lending values up by 9.3 per cent, suggesting some larger firms are taking out finance to support investment and growth.
  
  

Q2 also saw several sectors deliver strong performance reflected in Barclays’ anonymised client data, with software businesses recording a 21.9 per cent rise in incoming cash flows, while commercial property investment firms, including those focused on healthcare and residential developments, saw increases of 22.5 per cent and 10.3 per cent respectively.

Residential property firms also recorded one of the highest increases in lending balances, up 7.6 per cent, with the number of loans up by 7.0 per cent. The rise in the number of loans was behind only Housing Associations (14.4 per cent) and restaurants and cafes (14.5 per cent).

Businesses welcome No.10 North in vote of confidence

Businesses’ outlook for their own prosperity over the next year has risen to 86 per cent following the changes in the Government, up from 83 per cent in Q1 2026.

Business leaders also see opportunities from greater regional decision-making, with 60 per cent agreeing that devolution will improve economic opportunities in their area, with the strongest support coming from areas with prominent mayoralties, namely London (68 per cent), the West Midlands (64 per cent) and the North West (63 per cent).

Additionally, over a third (34 per cent) expect their business to benefit from the creation of No.10 North, of which over half (55 per cent) expect it to increase investment and opportunities for their region. This sentiment was most prominent across London (69 per cent) and the Midlands (54 per cent), while 59 per cent of businesses in the North West believe it will enable greater control over regional decision-making.

From a sector perspective, Technology (81 per cent) and IT and Telecoms (75 per cent) companies are most supportive of devolution, and also expect to see the most benefit from No.10 North (44 per cent and 52 per cent respectively).

However, firms are looking for greater policy certainty before committing to investment. Almost a quarter (23 per cent) believe the new Government should prioritise reforming or reducing business taxation to support growth and resilience, a policy backed by around a third of small and micro businesses (32 per cent). A further 32 per cent of larger businesses feel investment in technology and digital infrastructure should be a key focus.

Abdul Qureshi, Head of Barclays Business Banking, said: “Greater regional decision-making gives local leaders the opportunity to align skills, infrastructure, finance and business support more closely with the distinctive strengths of local economies. From technology clusters and advanced manufacturing to professional services, life sciences, clean energy and creative industries, the UK has deep regional specialisms that can be engines of national growth.

“If local leaders can make these clusters easier to identify, connect and invest in, devolution can help turn regional ambition into stronger productivity and broader UK economic growth.”

Investment appetite returns

Confidence in future growth is also translating into action, with 56 per cent of businesses planning to increase investment over the next 12 months and 46 per cent likely to seek new finance to support expansion and build resilience. Areas of focus include: training and development of staff (41 per cent), R&D (36 per cent), new or upgraded equipment (34 per cent), and digital products (33 per cent).

This represents a notable shift in investment intent, after a year in which just 23 per cent of businesses said they borrowed to fund investment.

The data also shows that the legacy of Covid-era support is continuing to shape financing decisions. Of the 42 per cent of businesses that received financial support during the pandemic, over two thirds (67 per cent) have subsequently taken out additional finance. Among those that have not, 36 per cent cite concerns about taking on additional debt and 26 per cent say borrowing costs are too high.

Matt Hammerstein, CEO of Barclays UK Corporate Bank, said: “The UK’s growth prospects depend on businesses having the confidence to invest. It is encouraging to see firms preparing to commit capital again, particularly in skills, R&D, equipment and digital capability, which are critical to improving productivity.

“The priority now is turning that intent into action. With clearer policy direction and the right access to finance, ambitious businesses across every region and sector can invest with confidence, scale faster and contribute to stronger economic growth.”

Barclays Business Prosperity Fund

To support businesses to invest in resilience and growth, The Barclays Business Prosperity Fund is available for new and existing Business Banking customers and UK Corporate Banking clients across the UK to apply for lending and refinancing on existing projects. Businesses can find out more at: home.barclays/businessprosperity.

£22bn is the total amount of lending Barclays has available to lend and 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.

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Notes to Editors

For more information please contact: harry.neicho@barclays.com, 07828 952458.

¹The Barclays Business Prosperity Index

In November 2024 Barclays launched the Barclays Business Prosperity Index, a trackable measure of business performance and future growth, with economic modelling produced in partnership with the Centre for Economics and Business Research (Cebr).

Unless otherwise stated, this press release is based on the Barclays Business Prosperity Index, which comprises survey data and Barclays anonymised client data. Anonymised client data has been weighted by company size to represent the UK business population, with the top five per cent of all metrics values removed at a national level, to best reflect the typical behaviour of the average business.

The Index includes survey research conducted among 1,000 senior business decision makers, between 21 ^st July -1 ^st August 2026, by Opinium Research 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) representative across sectors, and regions of the UK.

For more information read the report in full at: home.barclays/businessprosperity

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