German-British Business Outlook

Spring 2026 – Executive Summary
 

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German-British businesses remain resilient with strong current performance in the UK, but weak economic confidence is driving more cautious investment and key structural challenges persist. 

Strong current performance: 51% of firms view their UK operations positively, a clear improvement since autumn, with 43% reporting stable and  only 6% negative conditions.

Cautious short-term outlook: Despite current strength, expectations for the near future are more subdued and largely unchanged from six months ago.

Low economic confidence: Sentiment toward the UK economy remains weak, with just 2% expecting improvement. 35% foresee continued sluggish growth and 63% take a negative view on growth prospects.

Reduced investment appetite: Expansion plans in the UK have declined (14% vs. 23% in autumn), indicating increased caution among businesses.

Continued labour demand: 31% of companies plan to employ additional staff, suggesting resilience in employment despite broader economic concerns.

Drivers and challenges remain consistent: The UK market continues to be the main attraction for investment, while key challenges include political uncertainty, weak demand, Brexit-related barriers, and rising energy costs.

Policy priorities and adaptation: Businesses continue to call for improved UK-EU relations and reduced administrative burdens, while also adapting to geopolitical risks through measures such as nearshoring, market diversification, and increased stockpiling.