The Barclays Business Prosperity Index reveals that despite ongoing global economic challenges and rising energy costs, UK firms are accelerating AI adoption and upskilling their workforce to drive innovation and growth.
- Analysis of 1m+ Barclays clients shows a picture of resilient but cautious activity amid global uncertainty
- 42 per cent plan to hire for AI-focused roles, while one in five are already creating new positions dedicated to AI, as firms see potential for the UK to be a world AI leader
- In a sign of confidence, businesses plan to increase investment by 5.5 per cent over the next 12 months, as 89 per cent remain confident in their own business prosperity
- However, over half (55 per cent) are currently delaying investment decisions until the Autumn Budget, with (43 per cent) expecting to increase investment on the back of it
Nine in 10 businesses (89 per cent) are looking to solve business problems with AI over the next two years, with improving data analysis, forecasting or business intelligence, enhancing customer experience and reducing operational costs cited as the main opportunities.
Over the past year, businesses have already invested, on average, £235,600 on AI and emerging technologies, with 68 per cent planning to increase this in the next 12 months. Investment is more pronounced for large corporates of more than 250 employees who have invested an average of £400,000, compared to £225,500 from medium enterprises (50-249 employees) and £125,250 small businesses (10-49 employees).
Whilst AI is a key investment priority, businesses are also planning to increase overall investment by 5.5 per cent over the next 12 months, up by 1.7 percentage points from Q1. The main areas of focus for investment are staff training and development (42 per cent), improved digital products (37 per cent) and R&D (37 per cent).
This wave of investment comes in response to a significant workforce gap, with business leaders identifying AI and digital technology skills as the most in-demand. Four in 10 (39 per cent) cited this as the greatest area of skills shortage in the UK workforce. These gaps are especially pronounced in financial services (52 per cent) and IT & telecoms (48 per cent) with the tech sector itself (51 per cent) also experiencing significant technical skills shortages.
Reflecting growing demand for AI skills, collectively almost a third either have already (11 per cent) or are currently (21 per cent), hiring for AI-focused roles, with 42 per cent of businesses planning to do so.
The data is part of the Q2 Barclays Business Prosperity Index, which combines anonymised, client data from over one million Barclays business clients, with survey data from 1,000 business leaders, alongside analysis from the Centre for Economics and Business Research.
Businesses see potential for the UK to be a world AI leader
Among those already using AI, the reported benefits were clear. Almost one third (32 per cent) have seen improved idea generation and innovation, 31 per cent cite better decision-making driven by data or AI models, 30 per cent have seen improved customer experience or services, and a further 30 per cent have reduced operational costs.
Demonstrating support for the UK’s technological innovation, seven in 10 business leaders (72 per cent) believe the UK can be a global AI leader, with 19 per cent believing the UK already is.
According to business decision-makers, who don’t believe the UK is already an AI leader, the most important enablers include: clear and innovation-friendly AI regulation (27 per cent), support for regional AI training centres and skills hubs (25 per cent), sustained public and private investment in AI research and startups (24 per cent), and stronger partnerships between business and education (24 per cent).
Investment intentions remain despite uncertainty ahead of the Budget
Business leaders remain confident in the prosperity of their own business (89 per cent), with 65 percent confident in both the UK and global economy, although this has softened slightly since Q1 2025 (67 per cent and 67 per cent respectively). However, concerns around inflation (33 per cent) and increased utility costs (22 per cent) persist and are seen as the biggest barriers to growth.
Barclays’ anonymised client data comparing Q2 2024 and Q2 2025 also indicates a resilient, but muted landscape of business activity:
- Cash inflows fell slightly, by 0.8 per cent year on year
- Current account cash balances declined slightly (-0.4 per cent) whilst businesses increased overdraft usage (+3.3 per cent)
- Lending remained subdued (-5.9 per cent) on average for the typical business, but firms have borrowed £9bn of the Barclays Business Prosperity Fund in H1 2025
Meanwhile 75 per cent of leaders haven’t borrowed to invest in the past 12 months, with 40 per cent considering it, but deciding not to proceed. Of those who have decided against borrowing, 31 per cent cited high interest rates, 27 per cent uncertainty in the economic outlook and 25 per cent said they planned to hold off on borrowing until there were signs of greater stability.
Businesses are also looking ahead to the Government’s Autumn Budget, with over half (55 per cent) delaying investment decisions while awaiting further clarity. In a sign of optimism, over two in five businesses (43 per cent) expect to increase investment as a result of the budget, with this rising to 58 per cent among large businesses and 53 per cent among medium-sized businesses.
The research data also shows that among the 55 per cent that currently have investment plans on hold, the top four decisions being postponed include:
- Facility upgrades or expansions: 37 per cent
- Research or development of new or improved products: 36 per cent
- New equipment, machinery or vehicles: 35 per cent
- Staff training plans: 34 per cent
Business tax cuts top the list of desired measures businesses would most like to see from the Budget (45 per cent). This is especially important for small businesses (51 per cent) and micro businesses (51 per cent). Other priorities include investment incentives (37 per cent), public infrastructure investment (36 per cent), and support for workforce training and upskilling (36 per cent).
In a period of global uncertainty, three quarters of businesses (73 per cent) feel that business tax cuts will increase confidence in business success. Two in three (65 per cent) say that investment incentives would increase confidence, while others reflect that measures to reduce the regulatory burden (63 per cent) and increased funding for regional business development (63 per cent) would also increase confidence if included.
Matt Hammerstein, Chief Executive of Barclays UK Corporate Banking, said: “It’s encouraging to see an intent to invest from UK businesses, with many turning that into action. Against a backdrop of global uncertainty, there’s more to do to build confidence in the UK as a place for businesses to grow and scale.
“Our research suggests that AI is becoming a key tool to drive innovation, encourage investment and upskilling to lift productivity and build confidence in the UK as a global business hub.”
Energy costs remain a barrier to long-term growth
Meanwhile, energy costs continue to weigh heavily on business growth. Of the four fifths (84 per cent) of businesses saying they have been impacted by energy prices, nearly two in five (39 per cent) say they have needed to adjust budgets due to rising prices. In response, many businesses are investing in energy efficiency (42 per cent), switching to renewable energy sources (33 per cent ), or passing higher costs onto customers (26 per cent).
Abdul Qureshi, MD of Barclays Business Banking, said: “Despite economic and energy challenges, UK businesses are pushing ahead with AI and skills investment to unlock productivity and growth. Firms are showing resilience by adapting quickly to new technologies and equipping their people with the tools they need to thrive.”
