Confidence across the finance and leasing industry improved during the second quarter, although most firms continue to expect weaker UK economic conditions over the coming year.
The Finance & Leasing Association’s Q2 2026 Industry Outlook Survey found that 61% of respondents expect economic conditions to deteriorate during the next 12 months.
This fell from 81% in the first quarter, while the proportion expecting the economy to improve rose from 6% to 27%.
The findings also indicate that demand for finance remains resilient, driven by refinancing, replacement cycles and continuing funding requirements among businesses and consumers.
NEW BUSINESS EXPECTATIONS REMAIN STRONG
Almost two-thirds of respondents (63%) expect new business volumes to increase over the next year, broadly unchanged from the previous quarter.
FLA members provided a record £163bn of new finance to UK businesses and households during 2025, supporting investment in machinery, equipment and vehicles alongside consumer spending.
INSOLVENCY CONCERNS EASE
The proportion expecting business insolvencies to increase fell from 87% in the first quarter to 79%, while those anticipating higher personal insolvencies declined from 86% to 78%.
Expectations of an increase in customers falling into arrears also eased from 67% to 63%, with most respondents forecasting only modest deterioration.
Two-thirds (66%) expect funding availability to remain unchanged. The proportion anticipating higher funding costs falls from 78% to 63%.
INVESTMENT IN TECHNOLOGY
The survey highlights continued investment in artificial intelligence, automation and digital customer journeys as firms seek to improve efficiency, resilience and customer outcomes.
Geraldine Kilkelly, director of research and chief economist at the Finance & Leasing Association, says: “While our members remain cautious about the wider economic outlook, it is encouraging that confidence has improved since the start of the year and that they see the potential for new business growth over the next 12 months.
“Periods of uncertainty often accelerate change, and our latest survey suggests that many members are using the current environment to invest in technology, strengthen operational resilience and refine their approach to risk management.
“The pace of investment in AI, automation and digital processes show that members are focused not just on navigating near-term challenges, but on improving productivity, customer outcomes and competitiveness over the longer term.
“The findings reinforce the important role finance providers continue to play in supporting investment, innovation and economic growth across the UK, even during periods of economic uncertainty.”
