Over four fifths (84%) of private business owners in London are confident in delivering growth in the second half of 2026, according to KPMG.
At the start of 2026, KPMG’s annual Private Enterprise Barometer surveyed 1,500 privately owned businesses across the UK, including in London, spanning sectors such as professional services, financial services, technology, industrial manufacturing and retail, to understand their growth ambitions and priorities for the year ahead.
Six months on, following a challenging period for the UK and global economy amid instability in global energy markets, persistent inflation and trade restrictions, KPMG returned to these same businesses to understand how changing economic conditions have influenced their outlook.
At the beginning of the year, 91% of private businesses in London expressed confidence in their growth prospects for the next 12 months. By the mid-year mark, this sentiment has fallen, with confidence levels dipping to 84%, reflecting a change in expectations for growth during the remainder of the year.
Investment priorities
Despite this, technology continued to dominate as a leading investment priority for London-based businesses, with over three quarters (77%) identifying areas such as artificial intelligence (AI), cyber security and broader digital transformation as key focuses. This is 11-percentage points above the UK average and represents a 35-percentage point increase from 42% at the beginning of the year, signalling a dramatic shift towards long-term productivity and innovation in the capital.
Diversification also remains firmly on the agenda, with over three quarters (77%) of businesses across London looking to expand their operations overseas. This is the same as the start of 2026 and 16 percentage points above the national average.
Of businesses considering how to fund their growth plans, half (50%) are continuing to say they are open to private equity investment, above the UK average of 45%. Notably, nearly two thirds (61%) of businesses are turning to their own balance sheets to help fund their growth plans, reflecting a growing preference to retain control and rely on internal resources amid ongoing economic uncertainty.
Looking ahead
Amid higher confidence levels, businesses remain alert to the challenges ahead. 46% of businesses in the capital identified inflation and ongoing cost pressures, as well as global supply chain and trade disruption as the two biggest short-term risks facing their organisations. At the same time, firms are looking to policymakers to help strengthen long-term resilience. When asked about the Autumn Budget, nearly half (46%) of London firms would like to see technology adoption and digital capability prioritised by the incoming Chancellor.
Looking further ahead, the wider economic picture remains front of mind, with nearly two-thirds (61%) of respondents pointing to UK economic outlook and productivity growth as the biggest external factor shaping decisions around investment, growth and exit planning.
Anna Purchas, London Office Senior Partner at KPMG UK, said: “It’s encouraging that confidence among London’s private businesses remains so strong, with sentiment outpacing the UK average.
“Rather than pulling back, businesses are moving forward with investment in technology because they recognise this is key to both the growth and resilience of their operations. We’re seeing ambition to also look beyond the UK for opportunities, reflecting London’s continued strength as an international business hub.
“The challenge now is making sure that momentum isn’t lost. If we can continue to back innovation, strengthen digital capability and invest in the skills businesses need for the future, London and its firms are in a strong position to remain a leading destination for investment and growth.”
The national outlook
Nationally, private businesses outlined plans to continue to invest in technology and skills as part of efforts to boost growth after KPMG UK’s mid-year Private Enterprise Barometer revealed a dip in growth confidence due to ongoing UK and global uncertainty.
The survey found that 80% of business owners were confident in their firm’s growth prospects, down from 87% when asked earlier this year.
Overall, technology, including AI, remains the main investment priority signalling this is now shifting towards practical implementation of tech like AI to improve productivity, efficiency, and growth.
Looking ahead to the Autumn Budget, private businesses said the areas most in need of attention to help bolster growth are the faster adoption of new technology and boosting digital capability, growth-focused investment and the continued focus on a renewed industrial strategy.
Euan West, Head of KPMG Private Enterprise in the UK and EMA, said:
“2026 has continued to present private businesses with a challenging operating environment, shaped by uncertainty both at home and abroad.
“Against that backdrop, it is encouraging that eight in 10 business leaders remain confident about their growth prospects. While confidence has eased since the end of last year, the overall picture remains one of resilience and determination.
“What stands out most is how private businesses are responding. Rather than pulling back, they are investing in skills, technology and the capabilities that will help them remain competitive and unlock future growth.
“These results highlight a business community that is realistic about the challenges ahead but confident in its ability to overcome them.
“Private enterprise leaders are entrepreneurial, action-oriented and focused on what they can control. They are not waiting for conditions to improve; they are getting on with the job of creating growth.”