A third of British businesses are planning to invest in artificial intelligence in 2026 as companies turn their focus to productivity, skills and technology in an increasingly competitive market.
Research from Lloyds Bank shows that AI is becoming a central pillar of growth strategies, with companies looking to automate processes, improve efficiency and strengthen long-term competitiveness.
Lloyd's Business Barometer, based on a survey of 1,200 firms, found that improving productivity is the top priority for businesses going into the next year. As well as AI investments, 35 percent of companies said they plan to invest in team training in 2026, recognizing that new technologies require new skills to deliver real value.
Paul Kempster, managing director of commercial banking coverage at Lloyds Business & Commercial Banking, said the findings highlight a shift towards more strategic, future-focused investment.
“These are priorities that will support the long-term growth of businesses,” he said. “They help companies not only capitalize on opportunities in the year ahead, but also build a strong foundation beyond 2026.”
Previous research from Lloyds highlights why AI is increasingly gaining attention. In a study published in June, 82 percent of businesses that used AI said it increased productivity, while 76 percent reported improved profitability. 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 specialist skills, data privacy concerns and energy usage as factors slowing adoption. Still, 56 percent of companies said they intend to make new AI investments in the next year, while only a quarter of companies adopting the technology so far said they plan to do so.
The barometer also points to a modest improvement in sentiment. Overall business confidence rose five points to 47 percent in December, ten points higher than during 2025. Optimism about the broader UK economy hit a four-month high, with many companies expecting pricing pressure to continue to ease.
However, caution remains evident on the consumer side. Early indicators suggest a weak high-street performance ahead of Christmas, with the number of customers in stores on the last Saturday before Christmas down by almost 7 per cent year on year.
Overall, the data paints a picture of businesses that are looking inward, investing in technology and people to increase efficiency, while consumers remain cautious about demand and ongoing economic uncertainty.
jamie young
Jamie is a senior reporter at Business Matters, with over a decade of experience in UK SME business reporting. Jamie has a degree in Business Administration and regularly attends industry conferences and workshops. When Jamie is not reporting on the latest business developments, he is passionate about mentoring budding journalists and entrepreneurs to inspire the next generation of business leaders.