Barclays has introduced the Business Prosperity Index, a new quarterly report offering a detailed view of UK business performance and growth opportunities.
Created with the Centre for Economics and Business Research (Cebr), the index combines data from over one million Barclays business clients—including lending, cash flow, and international payments data—and survey insights from 1,000 business leaders, providing a comprehensive gauge of business sentiment.
The inaugural Q3 findings reveal that UK businesses are increasingly confident about growth, with planned investment in Q3 rising by 1.4% year-on-year. Post-Budget, nearly half (46%) of businesses have resumed previously paused investment plans, and 37% are more likely to seek additional funding. To support this ambition, Barclays has launched the Business Prosperity Fund, a £22bn fund designed to aid UK businesses in accessing finance for expansion, available to both new and existing Business Banking and UK Corporate Banking clients.
Matt Hammerstein, CEO of Barclays UK Corporate Banking, expressed cautious optimism: “Our data shows many businesses are ready to kick-start growth by seeking the funding they need. The availability of our £22bn Prosperity Fund will support business investment and help drive economic prosperity.”
Investment Appetite and Challenges
The Q3 survey highlights financial resilience and a strong appetite for investment, with the primary focus on staff training (44%) and R&D (35%). Despite ongoing pressures, 61% of business leaders expressed confidence in the UK economy’s direction. Improved cash flow across Barclays’ business accounts reflects this resilience, with net cash flow increasing by 17% year-on-year as businesses manage outflows effectively.
However, workforce shortages remain a critical challenge, with 62% of businesses citing skilled labour shortages. The issue is most pronounced in Scotland (92%), Yorkshire and the Humber (90%), and the West Midlands (88%). Nearly half of surveyed firms aim to invest in headcount growth, and many are prioritising training to counteract the skills gap.
Post-Inflation Pricing Pressures
While inflation has peaked, high production costs persist, leading businesses to adapt strategies to retain customers amid rising costs. Over half (52%) of firms plan to expand product offerings, despite rising costs, and 65% have introduced pricing adjustments, special offers, or reduced sizes (shrinkflation) to remain competitive.
Hannah Bernard, Head of Barclays Business Banking, noted the significance of the new index as a tool for business leaders and policymakers: “The Business Prosperity Index is designed to be a bellwether for business sentiment, helping businesses navigate the economic landscape and ensuring access to the resources needed for growth.”