UK CEOs adapt investment plans amid geopolitical shifts

• 78% of UK CEOs have altered their strategic investment plans in the last 12 months due to geopolitical or trade policy developments, according to the latest EY-Parthenon CEO Outlook Survey
• Despite this, 9 in 10 UK CEOs are feeling confident about the outlook for the next 12 months
• 96% of UK CEOs said they will be investing in AI technology in the next 12 months
• Investment appetite remains resilient as CEOs use M&A and strategic alliances to accelerate transformation efforts in 2026

Most UK CEOs have had to adapt their strategic investment plans over the last 12 months in response to geopolitical and trade policy developments, according to the latest EY-Parthenon CEO Outlook Survey. 

The survey of 100 UK CEOs found that 78% have altered their investment strategies, with 32% delaying a planned investment, 31% accelerating a planned investment and 9% stopping an investment due to geopolitical or trade policy developments.

Despite an uncertain economic and geopolitical environment, 9 in 10 UK CEOs are feeling confident about their company’s prospects for the next 12 months with 89% expecting profitability growth in 2026, although 47% anticipate increases in operating costs.

Silvia Rindone, EY UK&I Managing Partner for EY-Parthenon commented: “UK CEOs are recalibrating their strategies, demonstrating remarkable resilience and adaptability, while also showing a willingness to make bold decisions in the face of ongoing geopolitical and economic uncertainty. Business leaders must continue to act purposefully in the year ahead by scaling up innovation and investing in their workforce to unlock new opportunities and drive value creation.”

AI and enterprise-transformation helping to drive growth

The survey found that over half of respondents (57%) are currently undergoing a significant enterprise-wide transformation initiative, whilst 41% are planning to start in the next 12 months. Most CEOs (51%) were using a transformation initiative to improve their customer engagement and retention.

Investment in AI and emerging technology also remains a key priority for UK CEOs as they position themselves for growth. Almost all those surveyed (96%) said they would be investing in emerging technology in the next 12 months, with 40% believing that investment in AI will be critical for their organisation to adapt in a shifting geopolitical and economic environment.

Respondents were also optimistic about their ability to attract and retain talent, with 62% believing that investments in AI will help them to maintain current levels of employment or hire new talent over the coming year.

However, whilst 9 in 10 said they believe AI will have either a transformative or significant impact on their business model or operations in the next two years, they are also facing challenges when it comes to AI adoption. Thirty-six per cent said they are concerned with rising cyber risks, followed by high up-front running costs (23%).

Silvia Rindone commented: "While there is excitement surrounding the potential of AI, the reality for CEOs is far more nuanced. It is essential that business leaders adopt a pragmatic approach that acknowledges the transformative impact of AI while also addressing challenges such as cybersecurity risks, the regulatory landscape, and upskilling their workforce.”

Strategic alliances helping to unlock new capabilities for UK businesses

While geopolitical scrutiny is reshaping deal strategies, the survey found that investment appetite for UK CEOs remained resilient, with a growing preference for domestic transactions.

Almost all respondents (99%) said they are planning to pursue a transaction initiative over the next 12 months, with over half (54%) looking at M&A and 16% looking at divestments, spin-offs or IPOs. The majority (83%) said they are considering joint ventures or strategic alliances with third parties, enabling them to unlock immediate access to new capabilities and technology through more flexible deals.

Of the UK CEOs who are considering M&A activity, half (50%) said they are using a potential acquisition to accelerate top-line growth, followed by 44% who are using it to optimise operations and improve productivity.

Domestic capital investment continued to be a key focus, with the UK leading as the primary destination for business leaders, followed by Germany, the United States, France, and India.

Silvia Rindone added: “CEOs who actively reassess their capital allocation, effectively navigate geopolitical complexities, and focus on technology-driven M&A to build resilient and adaptable portfolios will be well-positioned to, not only withstand potential market volatility, but also capitalise on the opportunities that 2026 may present.”