Capify’s Q2 survey found employment-related taxes are the biggest brake on UK SME growth, affecting 85% of businesses’ hiring decisions as wage inflation and employer rules also weigh on recruitment.
69% of SMEs reported higher operating costs in the last quarter, while more than a third said access to finance is difficult, pointing to margin pressure and weaker capacity to invest.
70% of businesses said late payments are hurting cash flow, and 25% identified recruiting skilled staff as their biggest staffing challenge.
60% said AI has delivered little or no positive impact so far, suggesting adoption has stalled without clearer practical value or support.
22% of SMEs were confident in the UK economic outlook—up 10 points from Q1 2026—but more than four in 10 were less confident in their own business than a year ago.