Scottish business leaders are in a cautious place, but we can take heart from recent events

Jamie Grant, Head of Corporate Banking in Scotland
Read time: 4 minutes

Yesterday (November 18), Barclays hosted our Building Confidence in Scotland event. The event is part of Barclays broader initiative to support businesses across the UK and unlock regional growth. Barclays is deeply committed to the UK, and to our thriving Scottish business ecosystem. I enjoyed the event hugely; it was fantastic to meet clients and hear their insights and experience on what is going on day-to-day in their businesses.

At the event itself, my colleagues and I were able to share bespoke insights from our Business Prosperity Index for our audience, which is drawn from Barclays’ proprietary data - insights from approximately one million small and medium enterprises (SMEs) and a quarter of all UK corporates - as well as research from 500 Scottish business leaders.

The findings make for fascinating reading.

What’s clear from the Index data is that caution has become the watchword for Scottish businesses, particularly among small and medium enterprises (SMEs).

Scottish business cash inflows fell 6.1% year-on-year in Q3, a near two percentage point decrease compared to Q2, alongside that, outflows dropped 7.1% year-on-year, amid disciplined spend control. Meanwhile Scottish SMEs are building precautionary savings buffers, with savings up 5.6% year-on-year.

Looking at our research, 38% of business leaders across Scotland named economic uncertainty as their biggest challenge. That finding is more acute for SMEs, where 41% of leaders reported the level of certainty over future policy is having a negative impact on their business.

What we can see here is cautious discipline. Leaders are watching and waiting. They’re hesitant, particularly as they await the arrival of the Government’s Autumn Budget. But that does not mean they have lost confidence.

Despite uncertainty in the external environment, Scottish leaders remain confident about the future of their own businesses. 88% say they feel confident about their prosperity over the next 12 months. Again, that notion is more acute among SMEs, who come in six percentage points lower than larger businesses, but we are still talking about 86% confidence as opposed to 92%. And, across all business sizes, 87% and 86% of Scottish leaders are confident over the next three and five years.

To me, it looks as if Scottish leaders have kept their powder dry, but, if the Government’s Autumn Budget can deliver the certainty we’re all craving, then there is strong appetite to invest. That bodes rather well, because when it comes to securing investment, Scotland is leading the way...

The third quarter of 2025 might have seen widespread caution across the UK, and indeed across Scotland, but, according to recent findings from the Barclays Regional Investment Map, Scotland stood out for its growth in equity investment.

In Q3 the figure rose by 675% to 507ドルm in Q3. This was dominated by a fantastic win for Fidra Energy, which raised 445ドルm to deliver the Thorpe Marsh Battery Energy Storage System. When it is operational, Thorpe Marsh will be the largest battery storage project in the UK, and one of the largest in Europe, and it will bring with it capacity to power up to 800,000 homes during peak hours of electricity demand.

Clean energy production is fast becoming a Scottish superpower. Our country leads the UK in Clean Energy investment, with 450ドルm invested into clean energy companies. We are at the forefront for innovation, and these huge wins go to show Scotland’s growing role in the UK’s energy transition and our ability to attract large-scale capital for innovative projects.

None of this would be possible without collaboration, and it is no coincidence that Scotland is also the largest hub for university spinouts outside of the Golden Triangle of (Cambridge, London and Oxford). We recorded 339 spinouts in Q3 2025, and we are continuing to excel at translating research and innovation into high-growth businesses.

As my colleague Karen Braithwaite wrote earlier this week, the effects of ‘Liberation Day’ are still being profoundly across the UK. In Scotland, 83% of businesses remain concerned about trade and tariff uncertainty, with 79% revealing that uncertainty has influenced where their business is choosing to invest.

The disruption has been keen felt, and, in response, 23% of businesses have scaled back their operations, investment, or supply chain in the US since tariffs were announced.

But here we have seen resilience come to the fore again. Scottish leaders are pivoting, with companies are turning towards Europe, which leaders say has seen the biggest increase in international trade since Liberation Day. Over half of businesses in Scotland (58%) now say they plan to prioritise these markets over the next 12 months.

There have been upsides too. 31% of Scottish leaders have reported that the new environment has improved the competitiveness of UK-made products, while an additional 30% of businesses are increasing their investment in the domestic market as a result.

Our anonymised client data from Barclays tells the same story. Inbound international payments increased 2.3% year-on-year in Scotland, suggesting we’ve achieved stabilisation in cross-border activity.

Looking at the findings, it’s clear that Scottish leaders have a lot of their minds, but they continue to show remarkable resilience and optimism. Their ability to adapt, innovate, and invest for the future is what sets Scotland apart as a thriving hub for growth.

Leaders are watching and waiting at the moment, but they are confident and ready and primed. We should take heart from Scotland’s performance in equity investment over 2025’s third quarter and move forward with confidence.