UK businesses plan AI investment in 2026 as focus on manufacturing grows
A third of British businesses plan to invest in artificial intelligence by 2026 as firms sharpen their focus on productivity, skills and technology in an increasingly competitive market.
Research from Lloyds Bank shows that AI is becoming a key pillar of growth strategies, with companies looking to automate processes, improve efficiency and strengthen long-term competitiveness.
The Lloyds Business Barometer, based on a survey of 1,200 firms, found that productivity improvement is a priority for businesses going into the next year. Alongside AI investments, 35 percent of companies said they plan to invest in team training by 2026, recognizing that new technologies require new skills to deliver real value.
Paul Kempster, managing director of commercial banking at Lloyds Business & Commercial Banking, said the findings highlighted a shift towards more focused, future-oriented investment.
“These are important things that will support the growth of businesses for a long time,” he said. “They help firms not only take advantage of next year’s opportunities, but also build strong foundations beyond 2026.”
Early research from Lloyds underscores why AI is attracting increasing attention. In a study published in June, 82 percent of businesses using AI said they increased productivity, and 76 percent reported an improvement in profits. Retailers reported the strongest productivity gains, while manufacturers were most likely to see a positive impact on profits.
Despite the momentum, obstacles remain. Businesses cited the cost of AI tools, lack of specialized skills, data privacy concerns and energy consumption as factors limiting adoption. Still, 56 percent of firms said they intend to invest in new AI in the next year, and a quarter of those still to adopt the technology say they plan to do so.
The barometer also shows a modest improvement in sentiment. Overall business confidence rose five points in December to 47 percent, up ten points through 2025. Optimism about the wider UK economy rose to a four-month high, with many firms expecting price pressures to continue to ease.
However, caution remains on the part of consumers. Early indications suggest weak street performance in the run-up to Christmas, with store sales on the last Saturday before Christmas down about 7 percent year-on-year.
Taken together, the data paint a picture of businesses that are looking inward, investing in technology and people to drive efficiency, while remaining alert to weak consumer demand and continued economic uncertainty.
