UK businesses have shown increased caution in the third quarter of 2025, with many holding back on investment decisions ahead of the Autumn Budget, according to the latest Barclays Business Prosperity Index. The index combines anonymised client data from over one million UK businesses and a survey of 1,000 business leaders.
Barclays reports that cash inflows for UK businesses fell by 1.9% year-on-year in Q3, while outflows dropped by 3.1%, reflecting disciplined spending. Small and medium-sized enterprises (SMEs) built up savings buffers at a faster rate than larger companies, with SME savings rising by 6.1%. Lending activity showed some recovery, as loan balances increased by 2.2% and loan volumes rose by 4.1%, mainly driven by large corporates; SMEs remained cautious about borrowing to invest.
The survey found that more than half (55%) of businesses have postponed growth or expansion plans until after the Autumn Budget, and almost a third (31%) are seeking greater policy stability from the government to encourage private sector investment. Other priorities include support for reducing operating costs (36%), improving access to finance (35%), and increasing access to skilled labour (29%).
Economic uncertainty is now cited as the biggest challenge facing business leaders, with 36% naming it as their main concern—a rise of seven percentage points from last year. The impact of political uncertainty differs between business sizes: 45% of small businesses say uncertainty over future policy negatively affects them, while 58% of larger firms report a positive effect.
Despite these concerns, confidence among business leaders remains relatively strong. Eighty-six percent feel confident about their company’s prospects over the next year—91% among large firms and 81% among small ones—with similar confidence levels extending into three- and five-year outlooks.
Business leaders are closely watching the upcoming Budget announcement; 83% say they would increase investment if supportive measures such as reduced operating costs, better access to skilled labour, or improved policy stability are introduced. Seventy-two percent believe the Budget could help boost productivity in the UK economy.
In September, Barclays highlighted that aligning SME investment rates with those of larger companies could unlock £60 billion annually for the UK economy and recommended that the government target a national investment rate of 22% of GDP by Parliament's end—up from an estimated 17% in 2024.
Abdul Qureshi, Managing Director of Barclays Business Banking said: “In what has been a challenging year for UK business, it is of vital importance to build up confidence to invest and grow, particularly within the SME sector.
“It is interesting to see that seven in ten leaders believe having a national investment target will boost business investment, and we look forward to hearing the Chancellor’s approach to supporting UK business and wider productivity to drive growth in the upcoming Budget.”
Six months after Liberation Day—a key moment for post-Brexit trade arrangements—79% of businesses remain concerned about tariffs and global trade uncertainty. Trade policy now plays a significant role in shaping strategy; over three-quarters (77%) say such uncertainty has influenced their investment choices.
Rising supply chain costs since Liberation Day were reported as a challenge by nearly three in ten (28%) companies. In response to US tariff changes, sixty-two percent have scaled back operations or supply chains involving America and instead turned attention towards Europe; just over half plan to prioritise European markets over the coming year.
Almost a quarter (23%) say current conditions have improved competitiveness for UK-made products domestically; another thirty percent are investing more at home due to international disruption.
Data from Barclays indicates inbound international payments declined by 3.5% year-on-year but shows signs of stabilisation compared with earlier quarters.
Matt Hammerstein, CEO of Barclays UK Corporate Bank said: “There are positive signs ahead of the Budget – businesses pledge to increase investment if fiscal policies align with their ambitions, particularly on productivity. This is a defining moment to provide policy stability that builds confidence among the business community.
“Our data suggests UK businesses may be adapting to the new world order on tariffs. Continued flexibility will build confidence in the UK as an international trading nation, despite uncertain global headwinds.”
To support further growth initiatives among its clients, Barclays has made available £22 billion in lending through its Business Prosperity Fund for both new and existing customers across its Business Banking and Corporate Banking divisions during 2025.