UK businesses are battening down the hatches

National accountancy and advisory firm MHA’s six-monthly survey of 400 finance directors (FDs) across the UK, which has been released today, highlights the challenges UK businesses are currently facing.

In terms of ‘the highest priority for their business’, the latest edition of the MHA Finance Directors Business Confidence and Outlook report shows ‘profitability and efficiency’, while always an important consideration, continues to rise further. Three quarters of FDs cited it as a high priority, up from 65 per cent in 2025.

The biggest challenges for UK businesses have also shifted. Fewer than half of FDs cited inflation and cost pressures as a challenge in early 2025. However this has now risen to 64 per cent.

Unsurprisingly, technology and AI adoption is also moving quickly up respondents’ list of focus areas. Forty per cent cited this as a major challenge, up from just 15 per cent 18 months ago, which places it above retaining top talent on the priority list for the first time.

Technology and AI are becoming both a greater challenge and a higher priority. On one hand, it is cited as a growing investment priority and, at the same time, is a source of implementation pressure and skills and workforce issue.

By contrast, a major concern in 2025 was wage pressure, with over half of FDs mentioning it as a problem. That is true for only 29 per cent of those surveyed today.

The strongest recurring theme when the FDs were asked to highlight what more could the UK government do to help them was reduce regulation, red tape and the administrative burden.

Specifically, respondents wanted simpler regulation and reporting requirements, greater regulatory stability and fewer continual policy changes, reform of employment legislation, reduced ESG, audit and sustainability-reporting obligations, and better regulatory alignment with the EU and other jurisdictions.

On AI, respondents looked to clearer policies on responsible adoption, tax incentives for investment, help with systems integration and supporting skills to keep pace with technology.

Andrew Moyser, head of audit at MHA, said: “Finance directors are shifting their attention from expansion towards resilience, profitability and operational efficiency. Businesses are preparing for a potentially prolonged period of cost pressure and economic uncertainty.”

As part of the research, MHA also asked the FDs how confident they are about the economic outlook for the next 12 months, on a scale of one to five. 

The overall confidence score was just 2.4 out of five, giving at best a cautious picture. More than half of respondents (52 per cent) rated their confidence at just one or two. A further 41 per cent said three, only four per cent rated their confidence at four, and nobody selected five.

Andrew said: “While most FDs aren't entirely pessimistic, there is clearly very little strong confidence in the economic outlook over the next 12 months. It is a case of hoping that things will improve over the medium to long term.”