Barclays has launched the Business Prosperity Index, a new quarterly report that provides a detailed look at UK business performance and growth opportunities.
Created in collaboration with the Center for Economics and Business Research (Cebr), the index combines data from more than one million Barclays business clients – including lending, cash flow and international payments data – and survey insights from 1,000 business leaders, providing a comprehensive measure of business sentiment.
The opening results for the third quarter reveal that UK businesses are increasingly confident about growth, with planned investment in the third quarter up 1.4% year-on-year. Following the Budget, almost half of businesses (46%) have resumed their previously paused investment plans, with 37% likely to seek additional funding. To support this ambition, Barclays has launched the Business Prosperity Fund, a £22 billion fund designed to help UK businesses access finance to expand, available to new and existing UK business and corporate banking customers.
Matt Hammerstein, CEO of Corporate Banking at Barclays UK, expressed cautious optimism, saying: “Our data shows that many companies are ready to start growing by looking for the financing they need. The availability of our £22 billion Prosperity Fund It will support business investment and help drive economic prosperity.
Investment appetite and its challenges
The Q3 survey highlights financial flexibility and a strong appetite for investment, with a primary focus on employee training (44%) and research and development (35%). Despite continuing pressures, 61% of business leaders expressed confidence in the direction of the UK economy. The cash flow improvement across Barclays business accounts reflects this resilience, with net cash flow increasing by 17% year-on-year with the companies managing outflows effectively.
However, workforce shortages remain a major challenge, with 62% of companies citing a shortage of skilled workers. This problem is most pronounced in Scotland (92%), Yorkshire and Humber (90%), and the West Midlands (88%). Nearly half of the companies surveyed aim to invest in increasing headcount, and many are prioritizing training to close the skills gap.
Post-inflation pricing pressures
Although inflation has peaked, high production costs remain, prompting companies to adapt strategies to retain customers amid rising costs. More than half of companies (52%) plan to expand product offerings, despite rising costs, and 65% have introduced price adjustments, special offers or reduced volumes (deflationary inflation) to remain competitive.
Hannah Barnard, Head of Business Banking at Barclays, noted the importance of the new index as a tool for business leaders and policy makers: “The Business Prosperity Index is designed to act as an indicator of business sentiment, helping businesses navigate the economic landscape and ensuring access to the resources needed to grow.”