Funding growth in 2026 when most firms are holding back
Only 17% of UK firms plan to raise investment this year, the lowest share since the pandemic. Here is how to weigh funding a move while your competitors wait.
Reading time5 min read
CategoryBusiness guides
Written byThe bizbritain team
The British Chambers of Commerce published its latest economic forecast on 2 September 2026. One number in it should change how you plan the next six months. Just 17% of UK firms say they are increasing investment, and that is the lowest share since the pandemic.
Section 01
What the forecast actually says
According to the British Chambers of Commerce, GDP is expected to grow by 1.0% in 2026. That is a small upgrade on its previous forecast of 0.9%. Business investment is still expected to fall this year, by 0.2%.
The BCC also expects inflation to peak at 3.6% in the final quarter of 2026. It assumes the Bank of England base rate stays at 3.75% for the next two years. Unemployment is forecast to end 2026 at 5.0%.
So the picture is a slow recovery with no rate relief attached to it. Growth is a little better than expected. The cost of borrowing is not.
17%of UK firms are increasing investment, the lowest since the pandemic
1.0%forecast GDP growth for 2026, revised up from 0.9%
3.6%forecast inflation peak in the final quarter of 2026
3.75%base rate the BCC assumes for the next two years
Section 02
Why costs are the harder number
According to the British Chambers of Commerce, a typical small business now carries a domestic cost base more than 70% higher than in 2016. That is the part of your costs driven by policy rather than by suppliers.
Wages, employer contributions, business rates and compliance all sit inside that figure. None of them fall when demand picks up.
So a recovery does not fix a cost problem on its own. More volume helps, but only if the margin is there to carry it. That is worth checking before you commit to anything.
Section 03
What holding back actually costs
If 17% of firms are increasing investment, most of your competitors are standing still.
A quiet market is a cheaper market. Suppliers have capacity. Landlords have space. Good staff are easier to reach than they were two years ago.
None of that lasts. The firms who move first take the customer, the site and the hire. Everyone else pays more for the same thing a year later.
There is a fair argument on the other side, and it deserves saying plainly. Borrowing into a soft market is a real risk. A plan that only works if demand recovers is not a plan. The test is whether the numbers work at today's revenue, not next year's.
Section 04
How to fund a move when cash is tight
Price the move before you price the finance
Work out what the hire, the stock or the equipment actually costs you. That is the first number a lender asks for, and it is the one most owners have not written down.
Match the term to the thing you are buying
Equipment finance suits equipment. A short working capital line suits a stock buy. Paying for a five year asset out of this month's takings is what puts businesses under.
Model it at today's demand
Build the case on the revenue you have now. If it only works on the recovery arriving, it is not ready yet. Lenders apply the same test.
Put the deal in front of more than one lender
The high street banks cluster around a similar view of risk, so a no from one is not a no from all of them. A broker can put the same case to a wider range of lenders and come back with the ones that fit.
Start. Grow. Buy. If you are weighing a move this quarter, it is worth having the funding conversation before you commit to the spend rather than after.
This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.
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