UK business investment rises 1.7% as firms maintain growth ambitions

UK business investment increased by 1.7% in the second quarter of 2026, providing a positive signal that companies are continuing to commit capital to future growth despite persistent economic and cost pressures.

The latest provisional figures from the Office for National Statistics (ONS) show that business investment grew by 1.7% between April and June compared with the previous quarter. Investment was also 0.8% higher than in the same period of 2025.

The figures offer an encouraging indication of business confidence at a time when UK companies continue to contend with inflationary pressures, higher employment costs and uncertainty around the domestic and global economic outlook.

For the asset finance sector, continued investment is particularly significant, with businesses frequently relying on external finance to fund new machinery, vehicles, technology and other productive assets without tying up working capital.

Terry Lloyd, Head of Vendor, Paragon Bank SME Lending, said:

“At a time when many businesses are still managing volatile energy prices, increasing employment costs and inflationary pressures, these latest figures from the ONS are particularly reassuring. Business investment rose by 1.7% during the second quarter, now 0.8% higher than a year ago, which aligns with what we’re seeing on the ground, in that many firms are still planning for long-term growth despite ongoing economic and political instability.

“From a lender’s perspective, investment is one of the clearest indicators of business confidence. Whether it’s funding new equipment, technology or operational improvements, decisions to invest are what drives productivity, competitiveness and supports future economic growth.

“And let’s not forget, access to finance is key to maintaining that momentum. SMEs in particular are keen to invest, but doing so depends on having the confidence and funding to act. The British Business Bank’s Growth Guarantee Scheme has been a crucial lever in helping SMEs use finance to seize opportunities quickly – with Paragon having deployed over £80 million to UK SMEs to date.”

The ONS figures are presented in real terms, meaning the effects of price changes have been removed, giving a clearer indication of changes in the volume of investment being undertaken by businesses.