As politicians, business leaders and members of civil society gather for the World Economic Forum in Davos, Switzerland, the world is being reshaped before our eyes — economically, technologically and geopolitically.
There are great challenges and opportunities for every nation, and I remain optimistic that the UK has the strengths to navigate this moment. But in a world enduring more uncertainty than in decades, we must make sure that 2026 is the year when the UK accelerates if we are to achieve a long-term, sustainable growth trajectory.
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If we can position ourselves correctly, we have the capacity to do it. That’s the case “Team UK” can make in Davos this week.
Last year demonstrated that the UK’s economic resilience is real. While subdued growth made the headlines, the underlying economics showed encouraging signs: real wages rising, household savings at their highest levels for decades, and consumers and businesses continuing to reduce their indebtedness. About 60 per cent of households strengthened their financial position last year.
There remain challenges. The lowest-income households continue to struggle with cost of living pressures, and retail spending figures over Christmas illustrate that. And we should be honest that British businesses have been facing real pressures including higher supply chain, energy and borrowing costs relative to international competitors. But the underlying trends show that the UK’s economy still has capacity for investment and growth.
How do we unlock it? We must support households and businesses to rebuild confidence — because when households feel unsure about the future and businesses delay investment, the impact is felt across the economy. Early indications suggest sentiment is beginning to shift — our Lloyds Business Barometer ended 2025 ten points higher than where it began — but we need to move decisively to turn capacity into genuine momentum.
Banks and the wider financial services sector must play our part. So as interest rates continue to fall, we must help businesses to invest and create jobs, and households to have the confidence to spend, get onto the housing ladder and invest in British companies.
At Lloyds, championing businesses investing in the UK is central to our purpose. We are already lending nearly £500 billion to UK households and companies, and this year we will make more than £35 billion of new finance available to businesses — with nearly a third directed towards small and medium-sized enterprises (SMEs), the beating heart of the UK economy. Since 2011, we have supported more than a million first-time buyers to take their first step on the housing ladder and build long-term financial security. This is real support for the real economy.
In 2026, we need to turn ambition into delivery across a range of fronts: getting spades in the ground on infrastructure and housing; accelerating the regulatory reforms that unlock investment; helping firms adopt AI and innovate; and supporting people to build their long‑term financial capacity.
There has been encouraging progress — from improvements in planning to commitments on skills, innovation and modernising financial services regulation — but the challenge now is turning that into concrete change. If these measures take effect quickly, they can boost confidence, spur investment and help the UK translate its underlying strengths into sustained growth. As one of the UK’s leading financial institutions, we see both how much opportunity exists and how much potential is still waiting to be tapped.
Artificial intelligence is a once-in-a-generation opportunity for the UK and, collectively, we should organise ourselves to take advantage. We need to help our businesses and households to harness AI. Many of the almost one million businesses that bank with us are making it a priority to invest in AI tools and training this year to improve productivity. And helping individuals to plan their long-term financial resilience will strengthen the wider economy, too.
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A digital revolution is transforming how people manage their finances. I am seeing unprecedented levels of interaction with our investment services, particularly among younger adults. With technology, we can help people shape their financial futures as never before. At Lloyds we are investing heavily in our own digital capability to serve our customers, hiring specialist talent and equipping colleagues with the skills they need.
We need, too, to leverage our relative international position and competitive strengths. We continue to attract an outsize share of foreign direct investment, and have world-class universities, a vibrant technology ecosystem and global leadership in sectors such as financial services, clean energy and life sciences. These are national strategic advantages that can fuel competitiveness and prosperity across the country, and help us take new opportunities for export growth.
Progress in all of these areas will require continued strong collaboration between government, regulators and industry to implement the regulatory reform across sectors, including financial services, that can allow greater flows of investment right across the economy.
The global backdrop remains uncertain, but amid the challenges, there are reasons for optimism. The UK’s underlying strengths are real. If we want to banish self-defeating negativity and reach escape velocity from the low-growth trap of the last decade, they need to be our launch pad for businesses and households in 2026.
Charlie Nunn is chief executive of Lloyds Banking Group