British businesses are looking abroad for growth as optimism in the UK economy falls to 30% – here’s where they’re headed
UK private business owners are turning their gaze overseas in 2026, with a significant 70% planning to pursue international expansion to fuel growth amid a cooling domestic economic outlook.
According to the latest KPMG Private Enterprise Barometer, which polled 1,500 UK private business owners between late November and mid-December 2025, confidence in their own firms’ prospects remains robust, 87% expect growth over the next 12 months, but it’s down from 92% a year earlier.
Only 30% now hold a positive view of the wider UK economy, a sharp drop from 42% last year, as cost pressures and potential tax changes weigh on sentiment.
Going global
The survey reveals a clear strategy for countering subdued home-market conditions: go global.
Seven in ten business leaders are eyeing international markets to drive revenue, with 63% planning to enter new geographies or customer segments in the coming five years.
Top destinations include Western Europe (favoured by 46%), Eastern Europe (40%), North America (34%), and Asia (27% – up from 21% last year, potentially boosted by recent UK-India trade developments).
Revenue expectations remain upbeat, with 82% anticipating an increase in the next year, though most (54%) predict a modest 1–5% rise, while 28% forecast stronger growth above 5%. Similar patterns emerge for profitability, as 67% expect EBITDA to climb.
Big bets on AI
To power this ambitious push abroad, many are placing big bets on Artificial Intelligence. AI has surged to become a top investment priority – cited by 38% of respondents, edging ahead of general technology spending.
Businesses see AI delivering gains in efficiency and productivity (59%), better decision-making (55%), and accelerated innovation (54%). More than half plan to embed AI into products and services, with supporting investments in data quality (56%), cloud infrastructure (54%), and automation (33%).
Euan West, Head of UK Regions and UK & EMA Head of KPMG Private Enterprise, noted that it was primarily pragmatism driving these trends.
“Confidence among business leaders remains strong, but there is an undercurrent of caution amid a subdued economic outlook for the UK and most other developed economies. While international expansion is on the agenda, the geopolitical environment remains volatile and unpredictable, which means the UK’s private enterprise and family business leaders and owners are having to take a pragmatic and adaptable approach,” he said.
“Against this backdrop the search for growth is one that requires strategic clarity, determination and agility and it’s encouraging to see business leaders making AI an investment priority. As ever, I am heartened and inspired by the can-do spirit of the private enterprise community.”
