UK industries are looking into the new year with fear and loathing, thinking back to a chaotic 2025. Last year was tough enough with the tariffs, tax increases, and uncertainty in the domestic economy. Unsurprisingly, many businesses are just scrambling now to figure out what’s coming in 2026.
It has certainly been a challenging year for the UK economy. Additional tariffs that were placed on all goods became deeply damaging to trade, raising costs for businesses from all sectors that needed to import or export. The US tariffs have been tightening the screws even harder. They increase the administrative burden of trade cycles for UK businesses and introduce a damaging aura of unpredictability.
On top of tariffs, tax increases exacerbated American businesses’ financial resources. Countless businesses ended up paying much more in taxes. This further hampered their capacity to steer through an already treacherous economic waters. This combination of factors created an environment of uncertainty and nervousness among the business community as they planned for what lay ahead.
Domestic economic uncertainty was actually the second most important issue for all of 2025. Uncertain consumer confidence coupled with rapidly changing market conditions created a challenging environment for businesses to operate and plan within. Almost half of all firms said they were hesitant to invest or expand because of concerns over a possible downturn.
While businesses are optimistic about what the next year holds, they need to be wary of persistent geopolitical risks that still loom to disrupt smooth sailing in trade. The slow recovery of global trade cycles has left many companies at a disadvantage, unable to capitalize on potential growth opportunities. In addition to these base supply chain woes, these geopolitical woes are increasing costs, further stressing already thin profit margins.