The British Chambers of Commerce expects the UK economy to grow by 1% in 2026 and by the same amount in 2027, according to its latest quarterly forecast, published in September 2026. Business investment is forecast to fall by 0.2% this year before recovering to growth of 0.4% in 2027. Inflation is expected to peak at 3.6% at the end of 2026, the base rate is expected to stay at 3.75% over the next two years, and unemployment is forecast to rise to 5.4% in 2027.
The BCC notes that the improvement in this year’s investment figure largely reflects spending by larger firms. Its own survey data shows SME sentiment at its lowest level since the pandemic, with just 17% of firms increasing investment and labour costs and taxation cited as the main reasons.
Research from the Federation of Small Businesses points in the same direction. Its Small Business Index for the second quarter of 2026 found that only 18% of small firms expected to grow over the next year, the lowest figure since the index began in 2014, whilst 32% expected to shrink, sell or close.
For owner-managers, these figures set the backdrop for the year ahead. A low-growth market tends to reward close attention to margin, cash flow and the cost base, and places more weight on a clear return for any new investment. Both organisations are campaigning for measures that help smaller firms invest and grow in the Autumn Budget on 28 October.