UK CEOs prioritise localisation in response to geopolitical uncertainty
UK companies are accelerating localisation and regionalisation strategies to manage risk and build resilience as they navigate ongoing geopolitical uncertainty, according to the latest EY-Parthenon CEO Outlook Survey.
Conducted in August 2025, the survey of 100 UK CEOs – 70% of which are from publicly listed companies – found that CEO confidence has grown despite a turbulent macro and geopolitical environment. Eighty-seven per cent of UK CEOs said they were very or somewhat optimistic about company performance over the next 12 months, an increase from 83% in May this year.
UK CEOs are doubling down on localisation and regionalisation strategies
Against the backdrop of recent geopolitical challenges, including tariffs and trade negotiations, UK CEOs are taking proactive steps to embrace localisation and regionalisation strategies.
Localisation – initiatives such as producing goods in the country where they will be sold – has already been implemented by 41% of CEOs surveyed, while 23% have put regionalisation strategies, such as building supply chains within specific blocs, into practice. Forty-four per cent are currently rolling out localisation measures, and 37% are in the process of implementing regionalisation plans.
Of those surveyed, 65% said they viewed localisation as a long-term strategic shift rather than a short-term tactical adjustment, with 71% also echoing this trend from a regional perspective.
The key areas CEOs are applying localisation and regionalisation strategies include, operations and supply chain, technology and data, and research and development (R&D).
Silvia Rindone, EY UK&I Managing Partner for EY-Parthenon commented: “UK CEOs are taking decisive steps to localise and regionalise their businesses. These strategies are no longer just tactical responses to short-term disruption – they are fundamental to long-term resilience and growth.
“By rethinking supply chains, technology, and R&D at a local and regional level, companies are better able to mitigate geopolitical and trade risks while positioning themselves closer to their customers and innovation hubs. What we’re seeing is a strategic pivot that strengthens competitiveness today and builds a more secure foundation for the future.”
Challenges persist despite rising optimism
While CEOs are feeling more confident, many are also still cautious about the future. Forty-one per cent said they believe the current elevated levels of geopolitical and economic uncertainty will persist for up to three years.
Most respondents (42%) identified geopolitical tensions as the most significant challenge to achieving their company’s financial targets over the next 12 months, while 35% referenced macroeconomic and market uncertainty with the same number (35%) also identifying trade tensions. When it came to the subject of tariffs, 79% agreed that higher tariffs will materially weaken their company’s financial performance.
UK CEO respondents also identified clear priorities for policymakers. Ninety-two per cent said accelerating AI deployment in the public sector should be a national imperative, while 90% believe reducing public debt and restoring fiscal sustainability must be a top priority.
Dealmaking remains a top priority for UK CEOs
The survey found that portfolio reshaping is also high on the agenda, with 51% describing their approach to portfolio transformation over the next 12 months as increase investment to accelerate portfolio transformation, while 37% are planning to maintain a level of transformation consistent with recent years
All respondents said they are planning to pursue some kind of transaction initiative over the next 12 months. Thirty-eight per cent of CEOs are planning M&A deals with the aim of entering new markets (42%) and making large-scale acquisitions for efficiencies (39%). Three-quarters of respondents (75%) said they are looking at joint ventures or strategic alliances with third parties, while 20% were considering divestments, spin-offs or IPOs.
The UK was the top destination for capital investment, with 75% of UK CEOs planning to invest domestically over the next year, followed by the United States (37%) and India (18%).
Gavin Edwards, partner, EY-Parthenon commented: “Even against a backdrop of uncertainty, dealmaking remains central to UK CEOs’ growth strategies. CEOs and boards are looking beyond short-term volatility to reshape portfolios, enter new markets, and build scale. The breadth of activity is notable – whether it’s M&A to expand capabilities, joint ventures to share risk and innovation, or divestments to sharpen focus, CEOs are using transactions as a lever for resilience and long-term competitiveness. Every CEO we spoke to intends to pursue some sort of deal in the coming year, underscoring the critical role dealmaking continues to play for businesses seeking growth in this challenging trading environment.”