Research among 500 technology business leaders reveals that 62% consider the UK a more attractive location to grow and scale a tech business than mainland Europe, with 61% favouring the UK over the Asia-Pacific region and 60% preferring it to the United States.
The UK’s strong market opportunities and customer base, access to a skilled and diverse talent pool and faster-growing consumer take-up of technology products were three key differentiators cited in the UK’s favour.
Interest in the technology sector continues to surge, with half of tech businesses (50%) planning at least a 20% increase in AI investment over the next 12 months and 95% reporting growing demand from clients for AI products and services.
This is supported by wider confidence in the economic outlook. More than three quarters (76%) of tech firms report that the UK macroeconomic climate is giving their business a boost and a similar share (75%) believe the political landscape will help support growth over the next three years.
Investing in growth
Tech firms are committed to ongoing investment in their business. Seven in 10 (70%) expect to commit more capital this year, with an average increase of 8.9%.
Barclays’ anonymised client data comparing Q1 2024 and Q1 2025 also indicates strong investment intentions: Cash inflows into technology businesses rose by 1.7%, while overall cash balances in current accounts declined by 9.6%.
The tech sector had the highest increase in savings account balances, up 21.5%, suggesting tech businesses are holding onto cash ready to deploy in support of their investment plans.
Meanwhile overdraft usage fell by 26.2%, despite borrowing remaining relatively flat over the same timeframe.
These figures reflect stronger short-term liquidity and a shift away from flexible, high-cost borrowing towardsmorestructuredfinancing,whilealso signalling greater confidence in cash flow stability and long-term planning.
Despite plans for growth, some barriers to sourcing funding and investment remain. The most pressing are high costs associated with the fundraising process (40%), excessive regulatory requirements and compliance costs (36%) and limited government funding and grants (33%).
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