NatWest has warned customers of increased uncertainty due to global factors, particularly the ongoing conflict in the Middle East. The bank's UK Business Growth Tracker survey data for March 2026 indicates that while mid-market businesses have supported a sustained expansion of UK private sector output in the first quarter, confidence towards the future has eased.
Key findings from the NatWest UK Business Growth Tracker
The survey reveals that the upturn in mid-market activity was led by the service sector in March, with service providers citing resilient demand, successful long-term business expansion strategies, and the impact of new technology investments. In contrast, the manufacturing sector experienced softening production volumes due to rising price pressures, softer export sales, and supply chain disruptions.
Cost pressures and business optimism
Sebastian Burnside, NatWest's Chief Economist, commented: "UK businesses have continued to show resilience against the backdrop of a more challenging operating environment. Cost pressures have risen sharply again, especially for fuel and transport expenses, meaning input price inflation is at its highest level in over three years. Nonetheless, it is encouraging to see firms are still planning for growth over the year ahead, especially with an eye on longer-term investment and adaptation."
Andy Gray, Managing Director of Commercial Mid-Market at NatWest, added: "Despite increased uncertainty and cost pressures, many mid-market businesses are continuing to adapt and invest where it makes strategic sense. The latest data show firms balancing short-term caution with longer-term growth ambitions, particularly in areas such as technology and efficiency. Supporting customers to manage risk, maintain momentum and plan with confidence remains a priority as businesses navigate a more volatile operating environment."
