NatWest has delivered a significant and positive update for its vast network of over one million business clients across the United Kingdom. The high street bank reports that mid-market companies experienced a solid expansion in output during December 2025, a surge directly linked to an improvement in new order numbers.
Business Confidence High Entering 2026
According to the bank's analysis, business confidence, spearheaded by these mid-market enterprises, remains robust as the new year begins. Sebastian Burnside, NatWest’s Chief Economist, commented on the findings, stating that business owners are approaching 2026 with increased certainty. He noted they are hopeful for improved market confidence, which is expected to translate into stronger inflows of work throughout the year.
"Mid-market businesses are feeling notably brighter about their prospects than they were at the end of 2024," Burnside said. "Growth in the private sector continues to hinge on their performance, and they closed the year with a strong surge in sales." He attributed their sustained momentum to their scale and agility, which helped them navigate the uncertainty following the late November Budget.
Challenges and Opportunities for SMEs
While the outlook is positive, the data also highlights ongoing challenges, particularly for smaller firms. Burnside explained that while SMEs are optimistic about the year ahead, many continue to find the business environment difficult. A significant number cited the November Budget as a factor that caused customer decision-making to stall and demand to soften.
Furthermore, cost pressures remain a key concern. Costs for staff and raw materials are still elevated, though there is a prevailing hope that inflation will fall over the coming months, thereby easing this financial burden on companies.
The Mid-Market as a UK Economic Engine
Andy Gray, Managing Director of Commercial Mid-Market at NatWest, emphasised the critical role these businesses play in the national economy. "This data shows that mid-market businesses are a powerful engine of the UK economy, and an important source of economic growth," Gray stated.
He highlighted research from NatWest's 'Critical Middle' study, which found that just a 1% growth in this segment could add £35 billion in gross value to the UK economy by 2030. To help unlock this potential, NatWest established the Mid-Market Growth Council in 2025, an initiative supported by the UK government. With the council's one-year anniversary approaching, Gray confirmed ongoing work with industry leaders to advocate for tailored support for these vital companies.
