Trends shaping business in 2026

Ever the optimists, small business owners will be hoping for a more settled 2026 following a tumultuous year dealing with the fallout from economic headwinds, geopolitical tensions, international trade deals and high inflation.

Inflation is expected to gradually ease throughout 2026, averaging approximately 2.5% this year, according to the Office for Budget Responsibility. It’s expected that this will allow interest rates to be cut further in 2026.¹

At the Budget in November 2025 the Chancellor started to lay the foundations for the stability small business owners are craving. Against this calmer outlook, small business owners can look ahead to the trends that will shape business in 2026.  

From the next-stage evolution of AI to cybersecurity and sustainability, this is what you need to know to keep your business one step ahead this year.

AI moves up a gear

If 2025 was the year AI hit the mainstream, 2026 is the year it becomes embedded in our working lives. No longer just a buzzword, AI is moving from generative (generating content) to agentic (performing complex, multi-stage tasks).

For many savvy small business owners, AI will be adopted at scale for automating admin tasks, forecasting cash flow, managing inventory, running marketing and providing customer service. Those business owners who embrace AI will benefit from increased productivity and efficiency.  

Real-time access to financial data

Embedded finance will become the norm in 2026, and many small business owners will wonder how they lived without it. Integrating financial data, such as payments and invoices, into tools such as accounting software means an end to manual bookkeeping.

As a result, business owners can see their financial position in real time, allowing them to make faster, more reactive decisions, better manage cash flow and improve the accuracy of their reporting. Read more about how embedded finance could help your business here.

Authenticity is everything

In a world where AI can generate a month’s worth of LinkedIn posts in seconds, never has the old adage been more true: People buy from people.

Showing up authentically for your customers, suppliers and peers is more important than ever this year. Consumers are looking to connect on a real and meaningful level, which is great news for small business owners who already have a loyal, established network.

This year, prioritising customer experience with personalisation and showing the people and processes behind your brand will build trust and help small businesses stand out.

Social media is the new search engine

Last year, research found one in three consumers favour social media platforms when searching for product reviews or recommendations.²

This year, smart business owners will be showing up on social media to meet their customers. If you invest in content that mirrors how people search, you’ll reap the benefits with increased discoverability. Consider video ideas that answer people’s questions, such as ‘Best co-working cafes in [city]’, ‘Best gift ideas under £20’ or ‘How to use [product]’. 

Sustainability as a business strategy

Sustainability is now the expectation for consumers. Year-on-year, the number of consumers who seek out eco-friendly and ethical products grows.

With UK Sustainability Reporting Standards rolling out this year, small businesses who supply large companies will be required to provide data on their eco credentials.  

Businesses who embrace green practices will be the winners this year, securing more contracts and customer spend as people seek to make their own sustainable choices.

At the end of 2025, the Government announced £2 million of funding to help small businesses to help them invest in sustainability to cut operating costs. Find out more here.

Cybersecurity is non-negotiable

With business operations increasingly moving to digital-first, the risk of cyber attack increases. While AI will help run your business more efficiently and cost effectively, so too is it powering cheap and more sophisticated cyber attacks.

2026 sees the new UK Cyber Security and Resilience Bill come into force, designed to increase the UK defences against cyber attacks. For some who fall into the scope of the Bill, or supply business that do, stricter cybersecurity standards will be mandatory. For everyone else, cyber resilience should be your priority.

If you don’t know where to start, the National Cyber Security Centre has produced a Cyber Action Toolkit to help small business owners get up to speed.

If your business is looking for finance to help you capitalise on these trends, you can apply for a loan or line of credit in minutes. Check if you’re eligible today on our website.

01/01/26: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.

1 Reuters, 26 November 2025:

2 Sprout Social, 29 May 2025: Q2 2025 Pulse Survey