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Barclays has launched the Business Prosperity Index, a new quarterly report providing a detailed overview of UK business performance and growth opportunities.
Developed in partnership with the Center for Economics and Business Research (Cebr), the index combines data from more than one million Barclays business customers (including lending, cash flow and international payments data) and survey insights from 1,000 business leaders, providing a a comprehensive picture of the business results is created. sentiment.
Early findings for the third quarter show that UK businesses are increasingly confident about growth, with planned investment up 1.4% year-on-year in the third quarter. Post-Budget, almost half (46%) of businesses have resumed previously paused investment plans, and 37% are more likely to seek additional financing. To support this ambition, Barclays has launched the Business Prosperity Fund, a £22 billion fund designed to help UK businesses access finance for expansion, available to both new and existing Business Banking and UK Corporate Banking -customers.
Matt Hammerstein, CEO of Barclays UK Corporate Banking, expressed cautious optimism: “Our data shows that many companies are ready to kick-start growth by seeking the financing they need. The availability of our £22 billion Prosperity Fund will support business investment and help drive economic prosperity.”
Investment appetite and challenges
The third quarter survey points to financial resilience and a strong willingness to invest, with a particular emphasis on staff training (44%) and R&D (35%). Despite continued pressure, 61% of business leaders expressed confidence in the direction of the UK economy. The improved cash flow in Barclays’ business accounts reflects this resilience, with net cash flow increasing 17% year-on-year as businesses manage outflows effectively.
However, labor shortages remain a critical issue, with 62% of companies reporting a shortage of skilled workers. The problem is most pronounced in Scotland (92%), Yorkshire and the Humber (90%) and the West Midlands (88%). Nearly half of companies surveyed are committed to investing in workforce growth, and many are prioritizing training to address the skills gap.
Price pressure after inflation
While inflation has peaked, production costs remain high, forcing companies to adjust their strategies to retain customers despite rising costs. More than half (52%) of companies plan to expand their product offering despite rising costs, and 65% have made price adjustments, special offers or downsizing (shrinkflation) to stay competitive.
Hannah Bernard, head of Barclays Business Banking, highlighted the importance of the new index as a tool for business leaders and policymakers: “The Business Prosperity Index is designed to gauge business sentiment, helping businesses navigate the economic landscape and ensuring access to the resources needed for growth.”