Half of UK firms paused investment plans ahead of Budget, but now set to press ahead

A survey also found that 37% are more likely to seek additional funding to invest in their business growth

Almost half of UK firms paused their investment plans ahead of the Budget, but now plan to proceed with growth programmes despite concerns over cost pressures, new research reveals.

A post-Budget survey by banking giant Barclays showed that 46% of UK business leaders are now looking to restart plans that were put on hold in the lead up to the Chancellor’s October 30 announcements. The survey also found that 37% are more likely to seek additional funding to invest in their business growth.

Barclays' broader new business prosperity index shows that, despite growing concerns in some sectors of the economy, businesses remain optimistic about the outlook. A survey of 1,000 business leaders by Barclays revealed that nearly two-thirds of companies (61%) feel confident about the UK economic outlook.

The index, which also analyses data from over one million Barclays business clients, showed that firms expected to increase investment by 1.4% in the third quarter, up from the 0.7% increase reported for the second quarter.

Almost half of firms – 44% – are planning to spend on key areas such as staff training and development, with 35% allocating it towards research and development for products and services. However, these findings come amid warnings from many businesses about the cost implications of the Chancellor’s move in the Budget to increase employers’ national insurance contributions, as well as further rises in the minimum wage next year.

Retail giants such as Sainsbury’s, Marks & Spencer and Asda, along with hospitality heavyweights including pub chain Fuller’s, have voiced their concerns about significant cost increases following the Budget announcement, indicating that customers might see prices going up.

Barclays UK Corporate Banking boss Matt Hammerstein said: "The economic environment remains challenging for those on tight margins, but there are signs of cautious optimism emerging. Our data shows many businesses with investment plans on hold are now confident to kick-start growth by seeking the funding they need."

Barclays has unveiled a £22bin business prosperity fund for its current business banking and corporate clientele. The bank's third-quarter survey underscores the dynamic between growth pursuits and the existing environment of weak consumer confidence.

Some 65% of companies reported slashing prices or offering deals to keep their customer base. Hannah Bernard, head of Barclays business banking, said: “It’s reassuring that businesses remain committed to investing to grow, despite the extra financial pressures faced by many.”