70% of UK businesses fear economic uncertainty most as climate hits profits, hiring and costs
UK businesses have been hit hard by economic issues and remain worried and pessimistic about the future of UK plc, according to new research from international accountancy and business advisory group Azets.
The findings of the Q2 2026 Azets Barometer, a survey of nearly 450 (442) UK senior decision-makers, showed that economic uncertainty was the biggest concern over the next year for nearly 70% (69%) of respondents.
Just 43% were optimistic about the UK’s economic outlook over the next 12 months. More (45%) were pessimistic, with the remaining 12% neutral.
Businesses said the UK’s economic issues were taking a toll – 48% reported higher labour costs, 46% reported reduced profit margins, and 38% reported pressure on cashflow as their main concerns.
And amidst the tough trading climate, 70% of businesses expected to freeze or cut employee headcount and 82% expected to continue or increase borrowing.
Peter Gallanagh, UK CEO at Azets, said: “Businesses in the UK are on the cusp of a cycle of despair. They can’t invest and grow because of the economic climate, and the economy won’t grow at the pace we need it to because businesses can’t invest and grow.
“The government needs to take the chains off companies in the UK and give them the fuel they need to go for growth. With a change of prime minister taking place, this is the perfect time to look at the cost issues facing businesses and find ways the government can reduce the burden on firms so they can return what they do best: powering the economy.”
Businesses recognise, though, that resilience is largely self-directed, according to the findings of Azets’ survey. Respondents said top three factors that were critical to a firm’s resilience were people and talent, operational agility, and leadership and decision-making capability.
Peter Gallanagh says: “British businesses, especially SMEs have always known how and when to pivot and evolve in the face of adversity. Through pandemics, wars and economic crises they’ve shown the agility and the foresight to adapt to challenges and come out leaner and more efficient.”
And with the trading climate proving tough, 41% of UK firms said they’d be open to accepting investment from a business based outside of the UK.
Peter continues: “There’s no doubt that it has got harder and more expensive for businesses to access funding – whether that’s for growth or rescue.
“With this in mind, it’s no surprise that the best of British are looking abroad for support – and given the track record these businesses have of innovation and success it’s clear there’s a willing supply from foreign shores.”