A new study reveals the profound impact of the Iran conflict on UK businesses, with eight out of ten firms reporting negative effects. The research, conducted by Barclays UK Corporate Bank, shows that 20 per cent of companies have paused investment due to heightened geopolitical uncertainty.
Rising Costs and Supply Chain Woes
Businesses are primarily struggling with escalating energy and fuel costs, increased shipping expenses, and persistent supply chain disruptions. As a result, 37 per cent of firms plan to pass these additional costs onto consumers through higher prices.
Differing Strategies by Company Size
Small companies are adopting defensive measures, reducing borrowing and increasing savings to build financial buffers against ongoing instability. In contrast, larger firms are prioritising long-term investment, particularly in technology, to enhance resilience and competitiveness.
A significant number of companies are increasing investment in cybersecurity and adopting agentic AI technologies. Over half of the firms surveyed reported improved productivity from AI and automation, highlighting a shift towards digital transformation amid the crisis.
Call for Government Action
Matt Hammerstein, CEO of Barclays UK Corporate Bank, advocates for the creation of a Cabinet-level AI role within the UK government. He argues that such a position would strengthen national strategy and help capitalise on economic opportunities arising from technological advancements.
As one business leader noted, 'Uncertainty has become the norm,' underscoring the persistent challenges facing UK firms in the current geopolitical landscape.
