Barclays: UK businesses welcome political reset but seek greater policy certainty
Barclays’ Q2 2026 Business Prosperity Index 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 to Q2 2025, shows:
SMEs within Barclays Business Banking increased savings by 1.5 %, while the number of loans rose by 0.9%.
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 % and lending values up by 9.3 %, 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 % rise in incoming cash flows, while commercial property investment firms, including those focused on healthcare and residential developments, saw increases of 22.5 % and 10.3% respectively.
Residential property firms also recorded one of the highest increases in lending balances, up 7.6 %, with the number of loans up by 7.0 %. The rise in the number of loans was behind only Housing Associations (14.4 %) and restaurants and cafes (14.5 %).
Businesses welcome No.10 North in vote of confidence
Businesses’ outlook for their own prosperity over the next year has risen to 86 % following the changes in the government, up from 83 % in Q1 2026.
Business leaders also see opportunities from greater regional decision-making, with 60 % agreeing that devolution will improve economic opportunities in their area, with the strongest support coming from areas with prominent mayoralties, namely London (68 %), the West Midlands (64 %) and the North West (63 %).
Additionally, over a third (34 %) expect their business to benefit from the creation of No.10 North, of which over half (55 %) expect it to increase investment and opportunities for their region. This sentiment was most prominent across London (69 %) and the Midlands (54 %), while 59 % of businesses in the North West believe it will enable greater control over regional decision-making.
From a sector perspective, Technology (81 %) and IT and Telecoms (75 %) companies are most supportive of devolution, and also expect to see the most benefit from No.10 North (44 % and 52 % respectively).
However, firms are looking for greater policy certainty before committing to investment. Almost a quarter (23%) 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 %). A further 32% 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 % of businesses planning to increase investment over the next 12 months and 46 % likely to seek new finance to support expansion and build resilience. Areas of focus include: training and development of staff (41 %), R&D (36 %), new or upgraded equipment (34 %), and digital products (33 %).
This represents a notable shift in investment intent, after a year in which just 23 % 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% of businesses that received financial support during the pandemic, over two thirds (67 %) have subsequently taken out additional finance. Among those that have not, 36 % cite concerns about taking on additional debt and 26 % 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.”