UK businesses hit the pause button

The latest report from Barclays Business Prosperity Index shows that UK businesses are in a cautious mode as they prepare for the release of the Government’s Autumn Budget.

The Barclays Business Prosperity Index is a trackable measure of business performance and future growth – with economic modelling produced in partnership with the Centre for Economics and Business Research (Cebr).Centre for Economics and Business Research (Cebr). It brings together research from a survey with over 1,000 business decision makers with Barclays’ proprietary data and insights, which consists of approximately one million small and medium enterprises (SMEs) and a quarter of all UK corporates.

In the latest Barclays Business Prosperity Index (BPI) report, a business landscape of reservation and caution is ascendant in the third quarter of 2025, particularly among small and medium-sized businesses (SMEs) who are actively building savings buffers.

With the Government’s Autumn Budget due to be revealed on November 26, business leaders have made it clear that they are holding off on committing to investment plans until the Chancellor and her team are able to deliver clarity.

Over half (55%) of business leaders have reported that their investment plans are currently on hold, while a third (31%) called for greater policy stability from the Chancellor to unlock private sector investment.

However, investment plans are most definitely on hold, as opposed to being cancelled entirely. 83% of leaders say they intend to increase investment if the Chancellor introduces supportive measures such as reducing operating costs, improving access to skilled labour and providing policy stability.

As well as that, 72% of leaders say that they believe that the Budget will contribute to improving productivity in the UK economy. In terms of what they are looking for, 36% say are they looking to Government include support to drive down operating costs, 35% want help with improving access to finance, and 32% are looking for assistance in increasing access to skilled labour.

Business leaders remain self-confident, even though many are clear that economic uncertainty is becoming a growing challenge.

36% of leaders named economic uncertainty is now the biggest challenge they are facing, a seven-percentage point increase from the same point in 2025.

Overall, business sentiment towards the UK political environment is divided between SMEs and larger corporates. 45% of small business leaders, those with under 50 employees, said that the level of certainty over future policy is having a negative impact on them. The opposite was true for larger businesses, those with more than 250 employees on their books, with 58% of those leaders saying that the level of certainty over future policy delivering a positive effect.

Despite uncertainty in the external environment, leaders remain confident about the future of their own businesses. 86% of survey respondents feel confident about their prosperity over the next 12 months, with a nine-point lead for large firms at 91% compared to small businesses at 81%.

Across all business sizes, 85% and 83% of leaders are confident over the next three and five years.

During the third quarter of 2025, UK business cash inflows fell 1.9% year-on-year, though they improved by 1.6 percentage points from their performance in 2025’s second quarter. Alongside that, outflows dropped by 3.1% year-on-year, amidst disciplined spend control.

That spending control has been particularly present among SMEs, where businesses have been building up precautionary savings buffers with savings growing at a greater rate than large corporates, up 6.1% year-on-year.

Lending activity has shown signs of recovery, with both loan balances and volumes rising. Loan balances are up by 2.2% and loan volumes have risen by 4.1% year-on-year, largely driven by larger corporates, whilst SMEs remained tentative to borrow to invest.

The third quarter of 2025 marked six months since the advent of Liberation Day, and the consequences of the rollout tariffs are still being keenly felt.

79% of leaders say they remain concerned about trade and tariff uncertainty, the same level as when businesses were last polled by Barclays in May.

For many, the rollout has prompted a rethink and a clarifying moment on trade policy. Over three-quarters (77%) say that the uncertainty has influenced where their business is choosing to invest. The effects have been felt most acutely in global supply chains, with rising costs for goods and services the most cited challenge since Liberation Day, affecting 28% of businesses.

In response, almost two-thirds (62%) of business have scaled back their operations, investment, or supply chain in the US since tariffs were announced.

New strategies have seen companies turn towards Europe, which leaders say has seen the biggest increase in international trade since Liberation Day. Over half of businesses (51%) plan to prioritise these markets over the next 12 months.

Amid the global disruption, there have been some positive outcomes for the UK economy, with just under a quarter of businesses (23%) reporting that the new environment has improved the competitiveness of UK-made products. 30% of leaders say they have responded to tariffs by increasing their investment in the domestic market as a result.

Anonymous client data from Barclays revealed a similar picture, with inbound international payments declining -3.5% year-on-year, although the slowdown eased versus Q2, suggesting early stabilisation in cross-border activity.

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. To see how Barclays can work with you to support your business visit: home.barclays/businessprosperity .

22ドルbn is the total amount of lending Barclays has available to lend and support business growth among Business Banking and UK Corporate Banking clients in 2025. Subject to normal lending assessment, status and application. Terms and conditions apply.