UK business investment intentions have dropped to their weakest point since the Covid-19 pandemic, according to the latest Quarterly Economic Survey from the British Chambers of Commerce. Just 17 per cent of firms now plan to increase capital spending over the coming twelve months, down from 21 per cent in the first quarter of 2026.
The survey, drawn from thousands of responses across sectors and regions, paints a picture of an economy struggling to build momentum. Only 44 per cent of businesses said they expected turnover to improve in the year ahead, compared with 49 per cent in the previous quarter. Fewer than a third of respondents reported higher sales, while 28 per cent recorded a decline.
“Inflation has re-emerged as the number one concern for British businesses,” said David Bharier, Head of Research at the BCC. “When firms are contending with rising input costs and fragile consumer demand, investment naturally gets pushed down the priority list.”
The data aligns with broader economic readings from the Office for National Statistics, which revised end-of-2025 GDP growth down to just 0.1 per cent. While the first quarter of 2026 showed a stronger 0.6 per cent expansion, a 0.1 per cent contraction in April has cooled optimism that the rebound would stick.
A quarter of firms surveyed said they planned to cut back on investment, while the majority, 57 per cent, reported spending plans remained unchanged. The BCC noted that such widespread caution represents a significant drag on the UK”s long-term productivity potential.
“Investment today determines productivity tomorrow,” Bharier added. “A sustained reluctance to commit capital, particularly in technology and training, risks embedding a low-growth cycle that becomes harder to break.”
The findings land at a sensitive moment for policymakers. The Bank of England is weighing softer growth against persistent inflation pressures, with the Monetary Policy Committee divided on the timing of further rate adjustments. For businesses on the ground, the message from the survey is clear: confidence is fragile, and the investment pipeline is thinning.