68% of UK firms plan higher cybersecurity investment, reports Barclays

UK businesses are accelerating investment in cybersecurity and artificial intelligence as geopolitical tensions and economic uncertainty continue to reshape corporate priorities, according to new research from Barclays.

Barclays’ Q1 2026 Business Prosperity Index found that 85% of UK businesses remain confident in the strength of their business despite 80% reporting a negative impact from conflict in the Middle East. At the same time, more than half (54%) plan to increase overall investment over the next 12 months.

The research highlights a growing focus on resilience, with 68% of businesses expecting to increase cybersecurity spending over the coming year. However, almost half (46%) believe the adoption of new technologies is increasing their exposure to cybersecurity risks.

Artificial intelligence is also becoming increasingly embedded in business operations. More than six in 10 businesses (61%) now use agentic AI in some capacity, while 52% say AI and automation have improved productivity. Barclays found that cloud, cybersecurity and AI initiatives now account for 44% of planned technology budgets.

Despite ongoing confidence, geopolitical uncertainty is influencing investment decisions. One in five businesses (20%) said they had paused investment plans because of global instability.

Barclays’ analysis of anonymised data from around 900,000 UK businesses revealed differing responses between SMEs and larger corporates.

SMEs increased savings balances by 1.5%, recorded a modest 0.2% rise in cash inflows and reduced borrowing by 13.1%, suggesting a focus on strengthening financial resilience. In contrast, larger corporates reduced savings by 5.2% while increasing longer-term borrowing by 6.9%, indicating that investment plans remain on track despite economic uncertainty.

“What’s striking, however, is how businesses are responding. Rather than pulling back entirely, many are adapting to this new reality by tightening financial discipline, managing cash carefully and prioritising investment where it strengthens resilience, productivity and long-term competitiveness.”

Cybersecurity has become a particular area of focus, with fewer than three in 10 businesses (29%) confident in their ability to respond to a major cyber incident. Large organisations are leading investment efforts, with 36% increasing cybersecurity spending since the start of 2026, compared with 26% of small businesses and just 4% of micro businesses.

The average amount invested in cybersecurity during 2026 to date stands at £505,000, rising to £1.3 million among large businesses. For small businesses the figure falls to £134,000 and for micro firms to £15,000.

Businesses are also reporting tangible benefits from AI adoption. According to the research, employees are spending less time on administrative tasks, making decisions more quickly and focusing more of their time on higher-value activities as automation becomes more widely adopted.

“While larger firms push ahead with longer-term borrowing, many smaller businesses are focused on building cash buffers and closely managing their financial position.

“At the same time, AI is starting to present tangible opportunities for SMEs, particularly where it can help improve productivity and make everyday tasks more efficient.”