Nine in ten businesses looking to AI to solve key business issues

Nine in ten businesses (89 %) are looking to solve business problems with AI (Artificial Intelligence) over the next two years, with improving data analysis, forecasting or business intelligence, enhancing customer experience and reducing operational costs cited as the main opportunities according to new research by Barclays.

Over the past year, businesses have already invested, on average, £235,600 on AI and emerging technologies, with 68 % planning to increase this in the next 12 months. Investment is more pronounced for large corporates of more than 250 employees who have invested an average of £400,000, compared to £225,500 from medium enterprises (50-249 employees) and £125,250 small businesses (10-49 employees).

Whilst AI is a key investment priority, businesses are also planning to increase overall investment by 5.5 % over the next 12 months, up by 1.7 percentage points from Q1. The main areas of focus for investment are staff training and development (42 %), improved digital products (37 %) and R&D (37 %).

This wave of investment comes in response to a significant workforce gap, with business leaders identifying AI and digital technology skills as the most in-demand. Four in 10 (39 %) cited this as the greatest area of skills shortage in the UK workforce. These gaps are especially pronounced in financial services (52 %) and IT & telecoms (48 %) with the tech sector itself (51 %) also experiencing significant technical skills shortages.

Reflecting growing demand for AI skills, collectively almost a third either have already (11 %) or are currently (21 %), hiring for AI-focused roles, with 42 % of businesses planning to do so.

The data is part of the Q2 Barclays Business Prosperity Index, which combines anonymised, client data from over one million Barclays business clients, with survey data from 1,000 business leaders, alongside analysis from the Centre for Economics and Business Research.

Among those already using AI, the reported benefits were clear. Almost one third (32 %) have seen improved idea generation and innovation, 31 % cite better decision-making driven by data or AI models, 30 % have seen improved customer experience or services, and a further 30 % have reduced operational costs.

Demonstrating support for the UK’s technological innovation, seven in 10 business leaders (72 %) believe the UK can be a global AI leader, with 19 % believing the UK already is.

According to business decision-makers, who don’t believe the UK is already an AI leader,  the most important enablers include: clear and innovation-friendly AI regulation (27 %), support for regional AI training centres and skills hubs (25 %), sustained public and private investment in AI research and startups (24 %), and stronger partnerships between business and education (24 %).

Business leaders remain confident in the prosperity of their own business (89 %), with 65 percent confident in both the UK and global economy, although this has softened slightly since Q1 2025 (67 % and 67 % respectively). However, concerns around inflation (33 %) and increased utility costs (22 %) persist and are seen as the biggest barriers to growth.

Barclays’ anonymised client data comparing Q2 2024 and Q2 2025 also indicates a resilient, but muted landscape of business activity showing that cash inflows fell slightly, by 0.8 % year on year. Current account cash balances declined slightly (-0.4 %) whilst businesses increased overdraft usage (+3.3 %). WHilst lending remained subdued (-5.9 %) on average for the typical business, but firms have borrowed £9bn of the Barclays Business Prosperity Fund in H1 2025

Meanwhile, 75 % of leaders haven’t borrowed to invest in the past 12 months, with 40 % considering it, but deciding not to proceed. Of those who have decided against borrowing, 31 % cited high interest rates, 27 % uncertainty in the economic outlook and 25 % said they planned to hold off on borrowing until there were signs of greater stability.

Businesses are also looking ahead to the Government’s Autumn Budget, with over half (55 %)  delaying investment decisions while awaiting further clarity. In a sign of optimism, over two in five businesses (43 %) expect to increase investment as a result of the budget, with this rising to 58 % among large businesses and 53 % among medium-sized businesses.

The research data also shows that among the 55 % that currently have investment plans on hold, the top four decisions being postponed includes: Facility upgrades or expansions: 37 %, Research or development of new or improved products: 36 %, New equipment, machinery or vehicles: 35 % and Staff training plans: 34 %.

Business tax cuts top the list of desired measures businesses would most like to see from the Budget (45 %). This is especially important for small businesses (51 %) and micro businesses (51 %). Other priorities include investment incentives (37 %), public infrastructure investment (36 %), and support for workforce training and upskilling (36 %).

In a period of global uncertainty, three quarters of businesses (73 %) feel that business tax cuts will increase confidence in business success. Two in three (65 %) say that investment incentives would increase confidence, while others reflect that measures to reduce the regulatory burden (63 %) and increased funding for regional business development (63 %) would also increase confidence if included.

Matt Hammerstein, Chief Executive of Barclays UK Corporate Banking, said “It’s encouraging to see an intent to invest from UK businesses, with many turning that into action. Against a backdrop of global uncertainty, there’s more to do to build confidence in the UK as a place for businesses to grow and scale.

“Our research suggests that AI is becoming a key tool to drive innovation, encourage investment and upskilling to lift productivity and build confidence in the UK as a global business hub.”

Meanwhile, energy costs continue to weigh heavily on business growth. Of the four fifths (84 %) of businesses saying they have been impacted by energy prices, nearly two in five (39 %) say they have needed to adjust budgets due to rising prices. In response, many businesses are investing in energy efficiency (42 %), switching to renewable energy sources (33 % ), or passing higher costs onto customers (26 %).

Abdul Qureshi, MD of Barclays Business Banking, said: “Despite economic and energy challenges, UK businesses are pushing ahead with AI and skills investment to unlock productivity and growth. Firms are showing resilience by adapting quickly to new technologies and equipping their people with the tools they need to thrive.”