Nine businesses (89%) are looking to solve AI (artificial intelligence) business problems over the next two years by improving data analytics, improving forecasting or business intelligence, improving customer experience, and reducing operational costs cited as the main opportunity according to a new Barclays study.
Over the past year, companies have already invested an average of £235,600 in AI and emerging technologies, with 68% planning to increase this in the next 12 months. From £225,500 from medium-sized businesses (50-249 employees) and £125,250 small businesses (10-49 employees) to £225,500 (10-49 employees) (10-49 employees) to £225,500 (10-49 employees) (10-49 employees) to large companies with over 250 employees who have invested an average of £400,000.
While AI is a major investment priority, companies plan to increase overall investment by 5.5% over the next 12 months, up 1.7 percentage points from the first quarter. The main areas of investment are staff training and development (42%), improved digital products (37%), and R&D (37%).
This wave of investment addresses a critical workforce gap as business leaders identify AI and digital technology skills as the most in demand. Four in 10 (39%) cited this as the biggest area of skill shortage in the UK workforce. These gaps are particularly pronounced in financial services (52%), with IT & Telecoms (48%) experiencing significant technical skills shortages as well (51%).
Reflecting the growing demand for AI skills, almost a third has already (11%) or currently (21%) hired jobs in AI-focused roles, with 42% of companies planning to do so.
This data is part of the Q2 Barclays Business Prosporoti Index, combining anonymized client data from over 1 million Barclays business clients with research data from 1,000 business leaders, along with an analysis from the Center for Economics and Business Research, along with anonymized client data.
Among those who already use AI, the reported benefits were clear. Nearly a third (32%) have improved idea generation and innovation, with 31% citing decision improvements driven by data or AI models, 30% see improvements in customer experience or service, and an additional 30% reduce operational costs.
Demonstrating support for UK innovation, seven in 10 business leaders (72%) believe the UK can become a global AI leader, with 19% already thinking that the UK is.
According to business decision makers who don't already consider the UK to be an AI leader, the most important enablers include clear and innovation-friendly AI regulations (27%), support for local AI training centres and skill hubs (25%), sustainable and private investment in AI research and startups (24%), and a strong partnership between business and education (24%).
Business leaders are confident in both the UK and global economy, with 65% confidence in their business prosperity (89%), but have softened slightly since the first quarter of 2025 (67% and 67%, respectively). However, concerns about inflation (33%) and increased utility costs (22%) persist and are considered the biggest barrier to growth.
Barclays' anonymous client data comparing Q2 2024 and Q2 2025 also shows resilience, but calms the business activity landscape showing a 0.8% decline in cash inflows per year. The current account's cash balance has decreased slightly (-0.4%). While lending remained restrained on average in typical businesses, businesses borrowed the Barclays Business Prosperity Fund of £9 billion in H1 2025.
Meanwhile, 75% of leaders have not borrowed to invest in the past 12 months, while 40% have considered that, but have decided not to continue. Of those who opposed borrowing, 31% cited high interest rates, 27% uncertainty in the economic outlook, and 25% said they would refrain from borrowing until there are signs of stability.
Businesses are also aiming for the government's fall budget, with over half (55%) delaying investment decisions and making them even more clear. As a sign of optimism, more than two (43%) in five companies expect to increase their investment as a result of their budgets, up 58% for large companies and 53% for medium-sized companies.
Research data shows that out of 55% where investment plans are currently pending, the top four decisions to be postponed include: facility upgrades or expansion: 37%, research or development of new or improved products: 36%, new equipment, machinery or vehicle: 35% and staff training plan: 34%.
Business Tax Cuts is a list of the desired measures (45%) that businesses would most like to see from their budget. This is especially important for small and medium-sized businesses (51%) and micro-businesses (51%). Other priorities include investment incentives (37%), public infrastructure investment (36%), and workforce training and highly skilled support (36%).
During a period of global uncertainty, three-quarters of businesses (73%) feel that tax cuts in businesses increase confidence in business success. Two in three (65%) say investment incentives increase trust, while others believe that if they include measures to reduce regulatory burdens (63%) and increased funding for local business development (63%), they will increase trust.
Matt Hammerstein, CEO of Barclays UK Corporate Banking, said, “It's encouraging that it's aimed at investing from UK companies and that many people are trying to turn it into action. Against the backdrop of global uncertainty, there are things we do to build confidence as a place for businesses to grow and scale.
“Our research suggests that AI is becoming an important tool for promoting innovation, fostering investment, increasing productivity and building trust in the UK as a global business hub.”
Meanwhile, energy costs continue to focus on business growth. Of the five-quarters (84%) of companies who say they've been affected by energy prices, two in five (39%) say they need to adjust their budgets due to price increases. In response, many companies have invested in energy efficiency (42%), switched to renewable energy sources (33%), and handed high costs to customers (26%).
“We've been working hard to get the most out of our business,” said Abdul Qureshi, MD of Barclays Business Banking. “Despite the economic and energy challenges, UK companies are pushing for AI and skills investments to unlock productivity and growth.
