A third of UK businesses plan to invest in artificial intelligence in 2026 as companies increase their focus on productivity, skills and technology in an increasingly competitive market.
Research from Lloyds Bank shows that AI is becoming a central pillar of growth strategies as companies look to automate processes, improve efficiency and strengthen their long-term competitiveness.
Lloyd's Business Barometer, based on a survey of 1,200 companies, found that increasing productivity is a top priority for businesses over the coming year. Recognizing that new technologies require new skills to deliver real value, alongside investments in AI, 35% of companies said they also plan to invest in team training in 2026.
Paul Kempster, managing director of commercial bank coverage at Lloyds Business & Commercial Banking, said the findings highlight a shift towards more strategic, forward-looking investments.
“These are priorities that support the long-term growth of the company,” he said. “These will help businesses not only capitalize on the opportunities of the year ahead, but also build a strong foundation for 2026 and beyond.”
Initial research by Lloyds reveals the reasons for the increased focus on AI. In a study released in June, 82% of companies using AI said they had increased productivity, and 76% reported improved profitability. Retailers reported significant increases in productivity, while manufacturers were most likely to see a positive impact on profits.
Despite the momentum, barriers still remain. Companies cited the cost of AI tools, lack of specialized skills, data privacy concerns, and energy usage as factors delaying adoption. Still, 56% of companies said they intend to make new AI investments over the next year, and a quarter of companies that have not yet adopted AI technology said they plan to do so.
This barometer also shows a modest improvement in sentiment. Overall business confidence rose 5 points to 47% in December and rose 10 points through 2025. Optimism about the UK economy as a whole rose to a four-month high, with many businesses expecting price pressures to continue to ease.
However, the sense of caution on the part of consumers remains clear. Early indicators suggest that high street performance is weak ahead of Christmas, with in-store footfall falling by almost 7% on the last Saturday before Christmas compared to a year ago.
Taken together, these data paint a picture of companies looking inward and investing in technology and talent to increase efficiency, while remaining wary of fragile consumer demand and continued economic uncertainty.
jamie young
Jamie is a senior reporter at Business Matters and has over 10 years' experience in UK SME business reporting. Jamie has a degree in Business Administration and regularly attends industry conferences and workshops. When he's not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.
