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UK Business Confidence Rises to 47% in October 2026 as More Firms See Technology as Their Biggest Growth Opportunity

Business confidence rose six points to 47% in October 2026, according to the Lloyds Business Barometer published on 30 October, recovering part of September's fall. 43% of firms said new technology such as AI was their biggest growth opportunity.

By Entrepreneur Group · Published 1 November 2026

UK business confidence rose six points to 47% in October 2026, according to the Lloyds Business Barometer published on 30 October. That recovers part of September's sharp fall and leaves confidence well above the survey's long-term average of 30%. Firms' views of the wider economy improved most, with economic optimism up nine points to 40%.

The survey also found that 43% of businesses now see new technology, such as AI, automation and digitalisation, as their biggest growth opportunity.

The October figures

Lloyds' headline confidence measure combines firms' views of their own trading prospects and of the wider economy. In October:

• Overall confidence: 47%, up six points.
• Trading prospects: 55%, up five points, against a 12-month average of 56%. 63% of firms expect activity to increase over the next year and 8% expect a decrease.
• Economic optimism: 40%, up nine points, against a 12-month average of 37%. 59% were optimistic about the economy and 19% pessimistic.
• Prices: 55% of firms expect to raise their prices in the next 12 months, up three points for the second month in a row.

The rise follows a difficult September. Confidence fell 12 points to 41% that month, its lowest level since April 2025, according to Lloyds' September release. The September survey was carried out by Ipsos among about 1,200 UK companies between 2 and 16 September. Lloyds' October release does not mention the Budget on 28 October.

Smaller firms and sectors

Firms with turnover below £5 million, which covers most founder-led businesses, saw confidence rise eight points to 47%. Businesses that trade internationally were more confident, at 58%, than those that trade only in the UK, at 33%.

The picture by sector was mixed:

• Services: 52%, up 17 points.
• Manufacturing: 48%, up 12 points.
• Construction: 45%, down two points.
• Retail: 39%, down 12 points and well below its 12-month average of 49%.

Confidence improved in nine of the 12 UK regions and nations. The East of England, North East and North West were the most confident, while the West Midlands fell sharply and Yorkshire and the Humber and Northern Ireland were the lowest, both at 35%.

Technology as a growth opportunity

The share of firms naming new technology as their biggest growth opportunity rose nine points in a month to 43%, and is 17 points higher than in 2023. Among firms with international operations, 45% cited investment in technology as a driver of growth. Domestic firms were more likely to point to local customer demand, cited by 75%.

Lloyds said cost pressures remain a challenge. Fiamma Morton, Managing Director, SME Banking at Lloyds, said: "Cost pressures haven't gone away, so investment needs to work hard."

What it means for founders

This section is editorial guidance, not financial advice.

• Confidence is up, but costs are still rising. More than half of firms plan to raise prices. If you sell to other businesses, expect suppliers to push for increases, and review your own pricing before your costs move again.
• Retail is under more pressure than other sectors. Retail confidence fell while services and manufacturing rose, which matches the pressures on high streets covered in our report on shop price inflation.
• Check borrowing costs before you invest. If technology investment is part of your plans, the latest Bank of England lending figures show average rates on new SME loans eased to 6.55% in September.
• One month is not a trend. Confidence has moved sharply in both directions in recent months, so plan on cautious assumptions.

Frequently asked questions

What is UK business confidence in October 2026?

The Lloyds Business Barometer put overall business confidence at 47% in October 2026, up six points from September and above the long-term average of 30%.

How many UK businesses plan to raise prices?

In October 2026, 55% of firms in the Lloyds Business Barometer said they expect to raise their prices over the next 12 months, up three points on September.

What do UK businesses see as their biggest growth opportunity?

43% of firms in the October 2026 Lloyds Business Barometer said new technology, such as AI, automation and digitalisation, was their biggest growth opportunity, up nine points on the previous month.

Sources

1. Lloyds Banking Group: Business confidence rises as economic optimism increases (30 October 2026) (reviewed 1 November 2026)
2. Lloyds Bank: Business Barometer (reviewed 1 November 2026)
3. EuropaWire: Lloyds Business Barometer September 2026 release (30 September 2026) (reviewed 1 November 2026)