Almost half of UK SMEs are optimistic about the year ahead, but cost pressures remain the biggest obstacle to growth, according to new research from Simply Asset Finance released ahead of the Autumn Budget.
The study shows SME confidence is climbing: 49% of decision makers feel positive about the next 12 months, up from 43% a year ago. Notably, 19% say they are “really excited” about their growth prospects — more than double the 8% recorded in 2024.
However, despite growing optimism, the challenges facing SMEs remain largely unchanged from last year’s Budget. Businesses continue to grapple with high energy prices, inflationary pressures and rising taxes, prompting renewed calls for government action to boost productivity.
High energy costs remain the single biggest issue for SMEs, with 40% calling on the Chancellor for targeted support — rising sharply to 54% among medium-sized firms. The UK remains one of the most expensive advanced economies for business energy costs, leaving companies warning that they are operating at a structural disadvantage.
A further 34% of SMEs want enhanced tax incentives to stimulate investment and innovation, while calls for corporation tax cuts have almost doubled year-on-year to 36%, up from 19% in 2024.
Government-backed loans also continue to feature prominently on SME wish lists, with 26% of firms looking for better access to affordable finance as they plan expansion.
Confidence that the Government will deliver a pro-business Autumn Budget remains low, sitting at 36%. Many firms say they face the same barriers that held them back last year, with 46% citing a stagnant economy, 39% pointing to persistent high inflation and 30% highlighting high interest rates.
With 68% of SMEs saying the Autumn Budget will have a “significant” or “fundamental” impact on their growth plans, pressure is building ahead of the 26 November announcement.
Mike Randall, CEO of Simply Asset Finance, said: “It’s incredibly encouraging that SMEs are showing a clear appetite to invest and grow. But there is continued frustration at the lack of support with ever-rising costs and the same barriers blocking their path forward.
“Energy costs remain the biggest drag on growth — and businesses are clear they need support to allow more room to invest. With the UK facing some of the most expensive energy costs in the world, firms are operating at a disadvantage and something needs to give.
“With the Budget weeks away, the Government has a critical window. The right decisions could unlock growth and fuel productivity across the UK; the wrong ones risk stalling momentum at a defining moment.”
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SME confidence improves, but rising energy and tax costs continue to hinder growth ahead of the Autumn Budget