Spend enough time with Britain’s business leaders and you’ll hear two seemingly contradictory truths.
First: it’s hard out there. A real grind.
Second: but come and see my new product/office/amazing apprentices.
That paradox sat at the heart of a recent episode of Behind the Narrative, where I spoke to Shevaun Haviland, Director General of the British Chambers of Commerce – one of the most clear-eyed interpreters of what UK firms are really facing. And what struck me is that the environment is more nuanced than the headlines suggest.
Let’s start with the obvious. Businesses are living with the squeeze. Every decade has its volatility and challenges, but it’s hard to imagine a tougher last ten years in recent memory – Brexit, pandemic disruption, war in Ukraine, soaring energy prices, double-digit inflation, political instability, and now higher employment costs through National Insurance changes and wage increases. For many, particularly in hospitality and retail, margins were thin to begin with, and, contrary to a perception that businesses, especially those based in London, are raking it in, the reality is that today those margins are razor-thin. Or, as Haviland put it, it feels like “cost after cost after cost.” Businesses can’t and won’t simply pass these on to customers, particularly in a fragile consumer environment. The result is a kind of economic trench warfare: holding ground rather than advancing.
And yet most business leaders don’t stop at complaint, but pivot quickly to solutions. The same CEO who laments rising costs will proudly show you their new machinery, their expansion plans, or their apprentices. Call it a survival instinct. Entrepreneurs are, by necessity, optimists.
If the UK wants growth, it needs to harness, and not exhaust, that mindset.
There are three areas to leverage. Trade, infrastructure and AI.
Trade remains the fastest lever. Exporting is the most immediate route to expanding economic output, yet too many UK firms struggle to navigate the complexity of trading frameworks, particularly post-Brexit. Free trade agreements exist, but utilisation is uneven. What businesses want now is progress with the EU that reduces friction in day-to-day trading, especially in areas like food exports and energy.
Investment has been frozen by uncertainty, but there is plenty of capital out there looking for a home. Unlocking investment means not just funding infrastructure, but delivering it. Britain’s patchy record here is well known, but focusing only on failures misses the bigger picture. When we do deliver – think the Elizabeth line – the impact is transformative. The question is whether we can rebuild the confidence to repeat those successes at scale and encourage inward investment to support that growth.
Unlike trade and infrastructure, AI is not waiting for policy alignment. It is moving now. The problem is that many firms are still engaging at the surface level – using it to draft emails rather than redesign processes. If we take the quarterly earnings reports, the four hyperscalers (Amazon, Alphabet, Meta and Microsoft) have committed around $700bn in capital expenditure, most on infrastructure (including data centers) in 2026. How that translates to the likes of you and me in our daily lives is hard to grapple with, and we still lurch from calling AI a job-sucking villain to a productivity-creating hero.
However, for many small firms, AI still sits in the “too difficult” category , something to tackle later, once the immediate pressures ease. Support is needed to help, particularly SMEs, realise the huge potential of AI.
There’s a temptation in politics to reach for big announcements. But what businesses are asking for now is something both simpler and harder: delivery. Those long-promised reforms including business rates and reduction in red tape, a recognition that energy costs are punitive to the UK compared to European peers – in other words, some genuine support for those priority sectors already identified.
It would be easy to conclude from all this that the UK economy is stuck. That would be wrong.
Across sectors, there is still extraordinary dynamism: exporters redefining markets overnight, innovators pushing into AI and defence, local businesses scaling alongside major infrastructure projects. The fundamentals – talent, global reputation, entrepreneurial culture – remain strong.
Above all, we need to rediscover confidence in our own economy, and belief in what makes us unique. Because if there’s one thing that came through clearly in my conversation with Shevaun Haviland, it’s this: British business hasn’t lost its belief.
The question is whether the rest of us are ready to match it.
If you want to go beyond the headlines, listen to my full conversation with Shevaun Haviland on Behind the Narrative. It brings these issues to life – from the real impact of rising costs to the opportunities in trade, infrastructure and AI, and the resilience driving businesses across the UK.
Katharine Spence is a Partner at H/Advisors and co-host on Behind the Narrative podcast.