UK Firms Bet on AI and Skills to Drive Productivity in 2026

UK businesses are gearing up for a transformative 2026, with plans to boost productivity through major investments in artificial intelligence and workforce training. A new Lloyds Business Barometer study found that firms are prioritizing technology and skills development to seize growth opportunities in an increasingly competitive market.

With new growth opportunities on the horizon, UK businesses are prioritizing technology and skills development to stay competitive. According to Lloyds Bank’s latest Business Barometer survey of 1,200 firms, 35% plan to invest in team training this year, while one-third intend to focus on AI tools.

This study found that improving productivity stands out as the leading priority for UK businesses in 2026, with 42% of firms placing it at the top of their agenda. Moreover, 39% are focused on upskilling their teams to strengthen capabilities, while 37% aim to enhance their technological infrastructure.

Where do UK firms need the most support to achieve growth goals?

Additionally, 35% of UK businesses highlighted technology and productivity as the top priority areas where they need additional support to achieve their 2026 goals. Upskilling teams followed closely at 31%, while 25% of companies pointed to global expansion as another key area requiring assistance.

“These are investment priorities that will support businesses’ long-term growth, helping them capitalize on new opportunities that arise in the year ahead, but also build a firm foundation well beyond 2026,” said Paul Kempster, Managing Director for Commercial Banking Coverage at Lloyds Business and Commercial Banking.

According to previous research from Lloyds Business Barometer, 82% of UK firms using AI reported higher productivity, and 76% reported improved profitability. Moreover, retailers see the greatest productivity gains (84%), while manufacturers experience the strongest profitability boost (79%).

Upskilling the workforce to close the growing AI skills gap

Organizations prioritizing training primarily aim to boost productivity and enhance digital expertise. However, the UK continues to face a significant skills gap, particularly in roles related to automation and AI. Research by Esendex found that last summer, there were over 11,000 active vacancies in these areas, with AI positions accounting for nearly 70% of demand.

Employees stand to benefit from rising salaries as demand for tech talent surges. Recent data from Stack Overflow shows that AI and machine learning engineers in the UK now earn a median salary of about £112,000, while engineering managers average £102,000. Back-end developers have seen pay climb to £81,000, while product managers enjoyed the biggest jump at nearly 30%, followed by game developers and front-end specialists.

Strategic recommendations for competing in 2026: AI, skills, and talent readiness

To stay competitive in 2026, businesses should prioritize investments in artificial intelligence and digital tools, as these technologies have proven to deliver significant productivity gains. Moreover, organizations need to focus on workforce development by creating structured training programs that enhance digital and technical skills, particularly in high-demand areas such as data engineering and Python programming. Organizations should also allocate resources to strengthen their IT infrastructure and adopt tools that streamline processes to address technology and productivity gaps.

At the same time, companies must prepare for ongoing talent shortages in AI and automation by adopting proactive recruitment strategies and forging partnerships with educational institutions. Moreover, competitive salaries highlight the need for attractive compensation packages to secure top talent. Businesses should also commit to building long-term digital capabilities through scalable technology investments and continuous learning initiatives.