Finance industry confidence improves as demand for funding remains resilient
The Finance & Leasing Association’s (FLA) Q2 2026 Industry Outlook Survey, published today, showed some improvement in confidence across the finance and leasing industry, despite continued economic uncertainty.
While most respondents (61%) still expected UK economic conditions to weaken over the next 12 months, this was down from 81% in Q1 2026. At the same time, the proportion expecting conditions to improve increased from 6% to 27%.
FLA members provided a record £163bn of new finance to UK businesses and households in 2025, supporting investment in machinery, equipment, vehicles and consumer spending across the economy. The Q2 survey results suggested that confidence in demand for finance remained resilient.
Almost two-thirds of respondents (63%) expected new business to increase over the coming year, broadly unchanged from Q1. Respondents cited replacement cycles, refinancing activity, and ongoing funding needs among businesses and consumers as key drivers of demand.
Concerns about customer and economic risks had eased slightly. The proportion that anticipated increases in business insolvencies fell from 87% in Q1 2026 to 79% in Q2 2026, while those anticipating higher personal insolvencies declined from 86% to 78%. Expectations of increases in the number of customers in arrears also edged down, from 67% to 63%. Importantly, the overwhelming majority expected only modest increases rather than any significant deterioration.
Funding conditions were expected to remain stable. Two-thirds of respondents (66%) expected no change in funding availability, while the proportion expecting funding costs to rise fell from 78% to 63%.
The survey also highlighted continued investment in technology, with firms identifying AI, automation and digital customer journeys as important drivers of efficiency, customer outcomes and future growth.
Commenting on the survey results, Geraldine Kilkelly, director of research and chief economist at the FLA, said: “While our members remain cautious about the wider economic outlook, it is encouraging that confidence has improved since the start of the year and that they see the potential for new business growth over the next 12 months.
“Periods of uncertainty often accelerate change, and our latest survey suggests that many members are using the current environment to invest in technology, strengthen operational resilience and refine their approach to risk management.
“The pace of investment in AI, automation and digital processes show that members are focused not just on navigating near-term challenges, but on improving productivity, customer outcomes and competitiveness over the longer term.
“The findings reinforce the important role finance providers continue to play in supporting investment, innovation and economic growth across the UK, even during periods of economic uncertainty.”