Publication
The State of Small Business Britain 2025 Navigating uncertainty
Published: 17 February 2026
ERC Research Report
Associated Themes
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Business Growth -
Diversity -
Entrepreneurship -
Finance -
Innovation -
Internationalisation -
Management and Leadership -
Mental Health -
Productivity and performance -
Sustainability
2025 was another challenging year for the UK’s small businesses and those working to support them.
On one hand, there was much to be positive about. The evidence continues to show that the UK has a vibrant entrepreneurial culture, and that digital technology adoption is accelerating amongst businesses of all sizes. The Government also published a much-awaited small business strategy in the Summer, setting out a welcome plan for improved growth and productivity that acknowledged the diverse needs of the UK’s small business population.
But at the same time, small businesses have been operating within a wider climate of marked economic and political uncertainty. This has had an impact on the confidence and behaviour of small business leaders, as well as the people that work for them. The evidence points to a continued decline in some important growth-related behaviours amongst small businesses, deepening preexisting downward trends. Although technological change is bringing many opportunities for small businesses, it also brings a host of new challenges and threats.
As we look ahead to 2026, action is needed to raise confidence, increase innovation activity and address the pressures that are constraining small business investment. It is also vital that decisive action is taken to ensure the long-term stability of the small business support landscape, which continues to be under severe pressure.
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