Will 2026 Be a Year of Growth for UK Businesses
UK businesses are showing signs of growth in 2026, but the outlook remains cautious rather than strongly expansionary.
The latest British Chambers of Commerce survey found that 47% of firms expect turnover to increase over the next 12 months, up from 44% in the previous quarter. However, only 17% plan to increase investment in the short term, showing that many businesses are still reluctant to commit significant capital. British Chambers of Commerce
Business confidence is improving
Confidence has recovered slightly as 2026 has progressed.
At the start of the year, 49% of businesses expected turnover to improve. That fell to 44% in the second quarter before recovering to 47% in the third quarter. British Chambers of Commerce
That suggests businesses are still looking for growth opportunities, but expectations remain measured.
Sales performance is also mixed. In the latest BCC survey, 29% of firms reported higher domestic sales, while 25% reported a fall and 46% saw little change. British Chambers of Commerce
The wider economy is growing
Official figures provide some encouraging signs.
UK GDP grew by 0.7% in the three months to August 2026, compared with the previous three-month period. Services output increased by 0.9%, although production and construction both declined. Office for National Statistics
Business investment also increased by 1.8% in the second quarter of 2026 and was 5.2% higher than a year earlier. Office for National Statistics
So there is investment taking place, even though surveys suggest many smaller firms remain cautious about their immediate plans.
Recruitment remains difficult
Hiring is another area where growth is being held back.
Only 23% of businesses expected to increase their workforce in the BCC's latest recruitment research, while 66% planned to keep staffing levels unchanged.
Among firms actively trying to recruit, 73% reported difficulties finding suitable staff. British Chambers of Commerce
That means businesses may want to grow but still struggle to find the people they need to support expansion.
Costs remain the biggest obstacle
The main constraint on growth in 2026 continues to be the cost of doing business.
In the latest BCC survey:
- 60% of firms cited inflation as a concern;
- 52% cited taxation;
- 69% said labour costs were pushing prices higher; and
- 53% highlighted utility costs. British Chambers of Commerce
The BCC has also estimated that domestic policy-driven costs for a typical SME have risen by more than 70% over the past decade. British Chambers of Commerce
For many owners, this means growth decisions are being judged much more carefully than they might have been in a lower-cost environment.
Growth in 2026 is likely to be selective
The strongest businesses are still finding ways to grow, but expansion is increasingly focused on productivity and profitability rather than simply becoming bigger.
For many SMEs that means:
- improving margins;
- investing in technology;
- increasing recurring revenue;
- retaining good employees;
- reducing unnecessary costs; and
- focusing investment where the commercial return is clear.
That can be a healthier form of growth than chasing turnover alone.
What this means for business owners
A slower-growth environment does not mean buyers or investors stop looking for good businesses.
Businesses that can demonstrate consistent profitability, strong customer retention, reliable systems and resilience through difficult trading conditions can still attract serious interest.
For an owner considering a future sale, maintaining the quality of the business may matter more than achieving headline growth at any cost.
Thinking about the value of your business?
If your business has grown or changed during 2026, it may be useful to understand how that has affected its value.
At Intelligent, we can provide a free, confidential business Valuation, alongside information about current buyer demand and the factors likely to influence value.
No jargon. No pressure to sell. Just clear, useful advice.