NatWest has made a significant announcement affecting millions of customers across the United Kingdom, revealing a notable rise in business optimism as the country moves into 2026. The banking institution, which maintains branches in key locations including Birmingham, has reported that growing mid-market confidence is underpinning positive expectations for business activity throughout the coming year.
Mid-Market Optimism Drives Economic Expectations
According to NatWest's latest analysis, business confidence remains robust for 2026, with mid-market companies leading this positive trend. While small and medium-sized enterprises continue to experience declining business activity, the rate of this decline has shown signs of slowing, suggesting potential stabilisation in the challenging economic landscape.
Expert Economic Analysis
Sebastian Burnside, NatWest's Chief Economist, provided detailed commentary on the findings, stating: "The latest data reveals business owners are heading into 2026 with greater certainty, hopeful that market confidence will improve and optimistic that will lead to stronger inflows of work this year."
Burnside elaborated further: "Mid-market businesses are feeling notably brighter about their prospects than they were at the end of 2024. Growth in the private sector continues to hinge on their performance, and they closed the year with a strong surge in sales."
The economist highlighted the resilience of these businesses, noting: "Their scale and agility meant they were able to maintain solid momentum, despite the uncertainty raised by a late November Budget."
SME Challenges and Budget Impact
Regarding smaller businesses, Burnside observed: "SMEs are positive about the year ahead but continue to find the business environment challenging. Many pointed to the Budget as a factor which delayed decision-making among their customers and led to reduced demand."
He addressed ongoing cost pressures, stating: "Costs – particularly for staff and raw materials - remain elevated, but there is reason to hope that inflation will fall over the course of the year and reduce this burden."
Mid-Market as Economic Engine
Andy Gray, Managing Director of Commercial Mid-Market at NatWest, emphasised the crucial role of mid-market businesses in the UK economy. He stated: "This data shows that mid-market businesses are a powerful engine of the UK economy, and an important source of economic growth."
Gray highlighted research findings: "NatWest's Critical Middle research found that just 1% growth in this segment could add £35 billion in gross value add to the UK economy by 2030."
Government-Backed Growth Initiatives
The banking executive detailed institutional support mechanisms: "That's why we established the Mid-Market Growth Council last year, supported by the UK government. With the one-year anniversary of the Council fast approaching, we continue to work with business and industry leaders to advocate for tailored support to unlock the full potential of these businesses."
This comprehensive announcement from NatWest provides valuable insights into the current business landscape, revealing both the optimism among larger companies and the ongoing challenges faced by smaller enterprises as the UK economy navigates the complexities of 2026.
