Business

The UK economy unexpectedly contracted for a second consecutive month in October, underlining the fragility of growth as households and businesses reined in activity ahead of the Chancellor’s Autumn Budget.

Gross domestic product fell by 0.1 per cent in October, matching the decline seen in September, according to figures published by the Office for National Statistics. Economists had expected the economy to return to modest growth, forecasting an expansion of 0.1 per cent at the start of the fourth quarter.

The data showed that momentum failed to recover after disruption in September caused by a cyberattack that halted production at Jaguar Land Rover for much of the month. On a rolling three-month basis, output also fell by 0.1 per cent, pointing to a broader loss of economic traction.

Construction was the weakest-performing sector, with activity down 0.6 per cent in October, while the dominant services sector contracted by 0.3 per cent, marking its worst performance in three months. Production output rose by 1.1 per cent as car manufacturing rebounded following the end of the JLR shutdown, with vehicle output jumping 9.5 per cent.

Economists said the renewed slowdown reflected growing caution across the economy in the run-up to the Budget, alongside a cooling labour market and persistently high inflation. Callum McLaren-Stewart, an economist at Citi, said uncertainty over potential tax rises had likely discouraged consumer spending, while businesses delayed investment decisions amid a lack of clarity over which sectors would be affected.

The ONS said companies across a wide range of industries reported holding back activity while awaiting the outcome of the Budget, including manufacturers, construction firms, wholesalers, technology businesses, real estate companies and employment agencies.

The weak figures prompted some forecasters to downgrade their outlook for the final quarter of the year. Analysts at Deutsche Bank cut their fourth-quarter growth forecast to 0.1 per cent, citing lingering Budget-related uncertainty and subdued business investment.

Business groups including the CBI and the British Chambers of Commerce have warned that the Budget is unlikely to deliver a sustained uplift in growth over the next two years, despite the government’s plans to increase spending in the near term, funded by tax rises later in the parliament.

The Treasury said the government remained determined to boost growth, create jobs and invest in public services. Schools minister Georgia Gould said there were “green shoots” following the resumption of car production, though economists cautioned that underlying conditions remain weak.

The figures come ahead of the Bank of England’s final interest rate decision of the year next week. With GDP contracting and signs of labour market softening, investors are increasingly expecting the Monetary Policy Committee to consider a rate cut from the current 4 per cent.

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UK economy unexpectedly contracts again as growth stalls ahead of Budget

The Office for Budget Responsibility (OBR) has been targeted by almost a quarter of a million cyber attacks over the past year, a dramatic surge that comes just weeks after the fiscal watchdog accidentally leaked the Chancellor’s Budget online.

Freedom of Information data obtained by the Parliament Street think tank shows the OBR faced 238,678 hostile incidents in the past 12 months, including spam, malware, and phishing attempts. The figure represents a 162% increase on the previous year’s 90,958 attacks. Officials say all attacks were successfully blocked.

The revelations add to mounting scrutiny of the organisation following the resignation of chair Richard Hughes, who stepped down after the OBR’s flagship Economic and Fiscal Outlook (EFO) appeared online around 40 minutes before Rachel Reeves delivered her Budget.

A formal investigation led by Ciaran Martin, the former head of the National Cyber Security Centre, found the leak was the result of human error rather than a hostile cyber breach.

Martin’s report identified a “misunderstanding” of a WordPress plugin — Download Monitor — combined with a failure to configure the OBR’s server to block direct file access. The oversight allowed external users, including journalists, to locate and download the document simply by amending a URL.

The report noted that WordPress “can be onerous to configure” and that mistakes of this kind are “easily made”, but the consequences in this case were profound, triggering political chaos and rattling financial markets.

Cyber security specialists say the scale of attempted attacks on the OBR underscores the vulnerability of public sector bodies and the need for much tighter digital controls.

Graeme Stewart, head of public sector at Check Point, said: “These figures underline the growing volume of increasingly sophisticated cyber attacks directed at government organisations.

The accidental publication of market-sensitive documents should serve as a wake-up call about the risks associated with sloppy website management and weak security protocols.”

He added that failures of this kind “increase stress on already stretched systems” and that stronger processes and defences must be put in place “immediately”.

Kenny MacAulay, CEO of accounting software platform Acting Office, warned that the stakes extend far beyond a single department: “Data leaks can cause major issues for public sector bodies. Secure, well-managed publication systems are essential.

The consequences could be catastrophic — not only for the department involved but for the wider UK economy.”

The watchdog, whose forecasts underpin every Budget, is now racing to tighten its security and rebuild trust after one of the most damaging incidents in its 14-year history. With nearly a quarter of a million cyber attempts recorded in a single year — and public scrutiny sharper than ever — the OBR faces strong pressure to demonstrate that its systems, processes and governance are fit for purpose ahead of the next fiscal event.

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Scandal-hit OBR faced nearly 240,000 cyber attacks this year amid website failure that leaked Budget

A new leadership team has been appointed to the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services following its Annual General Meeting at Portcullis House, Westminster.

Members from both Houses came together on 10 December to elect officers and agree the group’s priorities for the year ahead — a year they warn will be pivotal for rebuilding trust in the UK’s financial system.

Hayes and Harlington MP John McDonnell was confirmed as the APPG’s new Chair, supported by a cross-party group of Vice Chairs: Sarah Bool MP, Lord Davies of Brixton, and Ben Lake MP. Together, they form one of Westminster’s most politically diverse leadership teams dedicated to financial reform.

Accepting the role, McDonnell said he was honoured to lead the group at a “critical juncture” for financial oversight in the UK, stressing that victims of investment fraud and regulatory failures “deserve justice, not excuses”, adding ‘We will not allow a race to the bottom in regulation’.

He argued that consumer protection must be viewed not as a brake on growth but as “the foundation of a financial system that works in the public interest”, pledging that the APPG would hold regulators and industry to account while working collaboratively with parliamentarians, civil society groups and trade bodies.

“We are keen to work with any entity that wants to help the financial sector flourish by serving society as best it can,” he said, adding that the APPG was already preparing its policy agenda for 2026.

Vice Chair Sarah Bool said that while Conservatives believe in free markets, those markets “must also be fair”, warning that widespread fraud and regulatory gaps have damaged public trust and undermined the UK’s financial reputation.

Lord Davies of Brixton highlighted the severe personal consequences of misconduct, saying financial fraud “destroys real lives, pensions stolen, homes lost, futures wiped out”. He vowed to continue challenging vested interests and advocating for ordinary families.

Ben Lake MP emphasised the devastation felt by communities across Wales and the wider UK, citing small businesses ruined by banking scandals and individuals who tragically took their own lives after losing savings to fraud. “These are not abstract policy issues, they affect people in every constituency,” he said.

The AGM reaffirmed the APPG’s central theme — that strong consumer protections and robust enforcement are not obstacles to economic success, but essential to it.

The group remains deeply concerned about what it calls the UK’s growing “Trust Deficit”, warning that weak oversight and enforcement deter public participation in financial markets, damage the City’s international standing and erode systemic stability.

Its 2025 investigative work, including two major parliamentary summits and a high-profile report scrutinising the Financial Conduct Authority, will inform its approach in 2026.

The APPG confirmed it will continue to serve as a platform for dialogue between victims, regulators, parliamentarians, financial firms and civil society. A programme of hearings, evidence-gathering, and policy engagement is already planned for the year ahead.

The group operates on a strictly non-commercial basis. Its Secretariat is run entirely pro bono through the Transparency Task Force, a certified social enterprise, ensuring that its work remains “free from undue influence and firmly rooted in the public interest”.

The group’s purpose is to advocate for victims of financial misconduct and fraud, and to drive reforms that deliver a fair and trusted financial system. It is governed by the rules of the Office of the Parliamentary Commissioner for Standards and receives no parliamentary funding.

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Cross-party MPs elect new leadership for APPG on Investment Fraud amid call for stronger consumer protection

Britain’s live events industry has issued a stark warning to the Prime Minister, urging an immediate review of the government’s new Business Rates system amid fears it will trigger widespread venue closures, job losses and higher ticket prices across the country.

In a strongly worded letter sent to No 10, senior figures from the sector said the changes unveiled at the Budget — including steep revaluations by the Valuations Office Agency (VOA) and a higher Business Rates multiplier for large event venues — would have “devastating, unintended consequences” for the cultural economy.

They warned that the combined effect of unprecedented valuation increases and higher tax charges would “undermine many of the Government’s own priorities”, despite the Budget’s transitional relief measures and lower multipliers for smaller properties.

The letter sets out a bleak picture for music and entertainment spaces at every level. Hundreds of grassroots music venues, the launchpads of artists such as Ed Sheeran — could be forced to shut as rising Business Rates make already fragile finances untenable.

“These venues are where artists like Ed Sheeran began their career,” the signatories wrote. “Their loss would deprive communities of valuable cultural spaces and limit the UK creative sector’s potential.”

The warnings extend to the UK’s major arenas, many of which are facing Business Rates hikes of more than 100%. Operators say these extra costs will almost certainly be passed on to consumers, pushing ticket prices higher at a time when the Government has vowed to tackle the cost-of-living crisis.

“Ticket prices for arena shows will increase,” the letter said. “Dramatic rises in tax costs will likely trickle through to consumers.”

Smaller arenas ‘on the brink’

Mid-sized venues — often the cultural heart of regional towns and cities — are also at risk. The sector fears that dramatic valuation jumps could push many to the edge of closure, triggering thousands of job losses and stripping local communities of vibrant cultural hubs that sustain high-street activity.

“These changes will reduce the visitor spending that supports local hotels, bars, restaurants, shops and taxis,” the letter said. “They will hollow out the cultural spaces that help places thrive.”

Sector says changes conflict with Government’s own growth plans

Industry leaders also accused the government of undermining its Industrial Strategy and Creative Sector Plan, which explicitly commit to reducing barriers to growth for live events. Instead, they argue, the new Business Rates regime risks throttling one of the UK’s most dynamic export industries.

Sector demands 40% rates relief and urgent valuation reform

The letter calls on ministers to take two immediate actions:

• Introduce a 40% Business Rates relief for all live venues.
Film studios have already been granted this level of relief until 2034, and the live events sector argues that venues — similarly classified as “critical creative infrastructure” — deserve the same protection.

• Launch a rapid inquiry into VOA valuation methods for event spaces, which operators say are “disproportionate, inappropriate and unjustified”.

Finally, the industry has requested an urgent roundtable with HM Treasury, the Department for Culture, Media and Sport, and the Department for Business and Trade to develop a plan to “save our venues” before closures begin.

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If you’d like a follow-up commentary, sector analysis, or Business Matters-style opinion column on the wider economic impact of venue closures and rising ticket prices, I can prepare that next.

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Live events sector warns PM of ‘devastating’ impact from Business Rates overhaul

The UK’s long-running “risk premium” in financial markets appears to be unwinding, with economists claiming investors are regaining confidence in Rachel Reeves’ fiscal strategy — and that the shift could save taxpayers billions of pounds over the next five years.

New analysis from the Institute for Public Policy Research (IPPR), a think tank with longstanding ties to Labour, shows gilt yields have fallen faster than those in the US and eurozone since September. The move follows a turbulent year in which UK borrowing costs climbed significantly above other G7 economies, fuelled by persistent inflation, weak growth, and speculation over the new government’s tax plans.

According to the IPPR, yields on UK government bonds have dropped by 0.2 percentage points more than their American and eurozone equivalents over recent months. While modest, the reversal is viewed as a meaningful sign that Reeves’ public embrace of strict fiscal rules, first restated at Labour conference — has reassured money markets jittery since Liz Truss’s mini-Budget in 2022.

Earlier this year, the gap between UK and US 10-year bond yields had blown out to 1.1 percentage points; against eurozone debt, the margin was 0.6 points. On 30-year bonds the divergence was even starker, hitting 1.5 points versus US treasuries. Those differences amounted to a clear “risk premium”, a financial penalty imposed on the UK for political unpredictability and concerns over fiscal credibility.

“The reasons for this premium are not straightforward, especially given that the UK’s fundamentals are stronger than many countries with lower borrowing costs,” the IPPR noted, highlighting Britain’s debt-to-GDP ratio of around 100%, lower than that of the US, Italy or Japan.

Senior Bank of England officials echoed the assessment. Deputy governor Sir Dave Ramsden told MPs on the Treasury committee that gilt market volatility ahead of Reeves’ Budget was noticeably lower than in comparable pre-Budget periods under the previous Conservative government.

“There were no concerns about financial stability,” he said, a marked contrast to the gilt market crisis triggered by Truss’s unfunded tax cuts.

The Bank now expects the Budget to shave up to 0.5 percentage points off inflation next year, thanks largely to Reeves’ decision to remove taxes from household energy bills. Inflation currently sits at 3.6%.

Despite the recent improvement, UK borrowing costs remain elevated by historical standards and are still higher than those faced by the US or eurozone members. The Office for Budget Responsibility forecasts that debt interest payments will exceed £100 billion in every year of this parliament.

However, if the remaining risk premium disappears, the IPPR calculates that taxpayers could save up to £7 billion a year by 2029–30, money that could otherwise be directed to public services or debt reduction.

Carsten Jung, associate director for economic policy at the IPPR, said a “clear, credible” fiscal path could make the UK “a star performer in the G7”, but warned that the Bank of England could undermine progress if it continues its aggressive quantitative tightening programme.

The Bank estimates its bond disposals have pushed up gilt yields by as much as 0.25 percentage points. Jung said the Bank should “pull its weight” and pause sales to avoid unnecessarily driving up borrowing costs at a time when the government is trying to restore stability.

Bond yields have also been kept higher by falling demand from final-salary pension schemes, once major institutional buyers of long-dated gilts.

For now, though, the message from the markets appears clearer than it has been for years: after a volatile 18 months, investors may finally believe that the UK has rediscovered its fiscal discipline.

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Falling gilt yields suggest Rachel Reeves has ‘won back market confidence’

Americans spent nearly $2.64 billion on OnlyFans in 2025, cementing the United States as the platform’s largest and most lucrative market, new analysis reveals.

Finbold, using data published by analytics firm OnlyGuider, calculated the figures across the first 334 days of the year, and the scale of spending is extraordinary. On average, Americans collectively shelled out $237 million per month, $55 million per week, and $7.9 million every day on the London-based subscription platform.

That breaks down to around $329,000 per hour, $5,483 per minute, or $91 per second, underscoring the extent to which OnlyFans has embedded itself in the US digital economy.

The figures represent a 1.95% rise on 2024, when American spending totalled $2.58 billion. Although the growth rate has slowed relative to other countries, the sheer scale of US spending continues to dwarf international markets. The United Kingdom sits a distant second at $531 million, almost five times less.

Per capita data shows that for every 10,000 Americans, roughly $77,334 was spent on OnlyFans in 2025, averaging out to $7.73 per person nationwide.

Some US cities dramatically outpace that norm. Atlanta, Orlando and Miami topped global spending charts, with numbers analysts say reflect how deeply the creator economy has woven itself into the culture of certain urban centres.

Atlanta in particular stands out as the world’s biggest OnlyFans-spending city, clocking in at $525,475 per 10,000 residents, followed by Orlando at $466,430 and Miami at $374,921.

Not everywhere moved in the same direction. Washington, D.C. saw the sharpest annual decline, with spending falling 6.64%, while Las Vegas recorded the biggest rebound, up 6.23% year-on-year.

Despite the enormous totals, the United States is no longer the fastest-growing market.

Canada’s year-on-year spending jumped 5.17%, while Mexico surged an astonishing 19.12%, though both remain far smaller markets in absolute terms.

OnlyGuider CEO Sam Pierce described Atlanta, Orlando and Miami as “world-leading outliers”, driving much of the platform’s global economy and reinforcing the US as the cornerstone of creator-driven digital spending.

While the growth in American spending has cooled, the country’s multi-billion-dollar appetite for creator content shows no sign of fading, raising major questions for policymakers, businesses and cultural analysts watching the booming online subscription economy.

If you’d like, I can also draft a shorter LinkedIn-ready version, a headline listicle version, or convert this into a data-led newsletter segment.

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Americans spend $7.9m a day on OnlyFans as 2025 creator economy surges

Disabled consumers across the UK continue to face significant barriers when trying to access products, services and customer support, according to new research published today by the Business Disability Forum (BDF).

The findings, based on an Opinium survey of 1,073 disabled adults, reveal that more than a third (37%) believe their experience as customers would improve if staff had a better understanding of disability and how different conditions affect their needs. The study points to persistent gaps in accessibility, awareness and service design, despite years of campaigning and guidance.

The research highlights that three in ten disabled people (30%) say it remains harder for them to find and purchase products or services suited to their needs compared with non-disabled customers. A further 22% report difficulties accessing good customer service, reinforcing concerns that many businesses still fail to meet basic accessibility expectations.

Diane Lightfoot, chief executive of the Business Disability Forum, said the findings should prompt businesses to rethink how they serve nearly one-quarter of the UK population.

“These findings show the difference product and service providers can make to disabled consumers when they are inclusive,” she said. “With one in four people in the UK having a disability, it is in all business interests to make disabled customers feel welcomed by offering the adjustments they need. Those that don’t risk missing out on a massive economic opportunity.”

Lightfoot added that accessibility should be viewed not only as a compliance issue but as a reputational advantage. “Inclusive brands are seen as ethical and socially responsible, which strengthens customer loyalty,” she said. She pointed to BDF’s earlier research, What Disabled Consumers Choose to Buy and Why, which shows that disabled shoppers are more likely to support businesses that communicate their commitment to accessibility.

What disabled consumers say would improve their experience

Respondents identified several changes that would make the biggest difference to their day-to-day interactions with brands and service providers. Easier access to support was cited by 29%, while 21% said offering multiple contact options for customer services—such as live chat, email or video calls—would significantly improve accessibility. Nearly one in five respondents (19%) said businesses should prioritise inclusive design from the outset.

Understanding what effective inclusion looks like remains a challenge for many organisations. To address this, the Business Disability Forum uses its annual Disability Smart Impact Awards to showcase best practice. Last year’s winners included Alexandra Palace for transforming its Grade II-listed cultural venue into an accessible space for visitors of all abilities, and Unilever for deploying accessible packaging technologies, including scannable QR codes that provide spoken product information.

Entries for the 2026 Disability Smart Impact Awards are now open, and BDF is encouraging organisations to submit examples of innovation in inclusive customer experience, product design, technology and communication.

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Disabled Customers Still Face Major Barriers, New BDF Research Warns

Policy uncertainty in Westminster is weighing heavily on Britain’s small business sector, according to one of the City’s most influential bankers.

Kunal Shah, co-head of Goldman Sachs International, warned that a lack of clarity over taxation and employment laws is creating an “overhang” that is discouraging entrepreneurs from investing and hiring.

Speaking to The Times ahead of a House of Commons reception marking 15 years of Goldman’s 10,000 Small Businesses programme, Shah said founders were increasingly nervous about the government’s shifting regulatory agenda. “One of the things that comes back often from these companies is the tax burden in the UK,” he said. “The Budget last month was a focal point for everyone to see again how tough the fiscal maths is now. It introduces challenges for any entrepreneurs and the business environment here.”

Although small businesses remain upbeat about their own performance, Shah suggested that Labour’s manifesto commitments — particularly around expanded employment rights — had left many founders uneasy about future costs. “These entrepreneurs are largely optimistic around their own businesses, around things they can control,” he said. “But it is all the uncertainty over the manifesto pledges that can hamper investment confidence. That continues to be an overhang.”

Labour last month abandoned its pledge for “day-one” unfair dismissal rights, striking a compromise with unions to reduce the qualifying period to six months rather than two years. The government insisted the move would still drive a major shift in worker protections, but business groups warned the proposals would require significant adjustments to hiring strategies.

Shah, who joined Goldman in 2004 and became a partner a decade later, said UK firms now had clarity on taxation for the next year but warned that broader economic pressures continued to erode SME confidence. “There is a longer-running productivity problem,” he said, adding that “sticky inflation” and interest rates “at the restrictive end” were feeding into company finances.

Despite these headwinds, Shah pointed to genuine opportunities for growth, including improved trade ties with the US and India. He also praised the Chancellor’s stamp duty holiday for newly listed shares as a pragmatic move to revive the UK’s capital markets. “It shows clear intent,” he said. “These are signs of how they want to support the broader growth agenda.”

More than 2,500 companies have been through Goldman’s free training scheme for founders of small firms, targeted at businesses with revenues above £250,000 and staff numbers between 5 and 50. Research by Professor Mark Hart of the Enterprise Research Centre shows participants increased revenues by 43% within three years, adding an average £665,000 to their top line.

After ten years, these businesses were 14% more productive than comparable firms that did not take part.

The UK government’s own equivalent — the Help to Grow scheme — has enrolled 10,000 leaders since 2021, with funding secured until 2029.

Despite wider market uncertainty, Shah said Goldman expected another strong year for fees from mergers and acquisitions. The bank has already been involved in $1.5 trillion worth of deals in 2025 and is advising on several high-profile transactions across Europe. “The backlog is healthy,” he said. “We see that momentum continuing into next year.”

Goldman recently advised Shawbrook on its £1.9 billion flotation in London — the largest in several years — and is closely watching the dramatic takeover battle for Warner Bros, though it is not advising any of the bidders.

Government engagement improving — but uncertainty remains the drag

Shah welcomed the government’s willingness to engage with the banking sector, following meetings with Rachel Reeves, Anthony Gutman and Goldman Sachs CEO David Solomon earlier this year. But he was unequivocal in his assessment that uncertainty is the biggest factor undermining SME confidence.

As he put it: “Entrepreneurs are optimistic — but optimism only gets you so far when you can’t plan ahead.”

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Goldman Sachs warns UK policy uncertainty is creating a ‘confidence overhang’ for small businesses

A major US defence technology company is preparing to manufacture next-generation autonomous fighter drones for the British Army on the Isle of Wight, marking one of the most significant foreign defence investments in UK aerospace in years.

California-based Anduril Industries, the fast-rising defence start-up valued at $30bn, has partnered with British engineering group GKN Aerospace to build components for the drones in Cowes. The plan hinges on winning a Ministry of Defence competition to produce a new class of autonomous systems designed to fly alongside the Army’s Apache attack helicopters.

The programme, known as Project NYX, is expected to reshape Britain’s battlefield aviation capabilities. Tender documents describe an autonomous platform able to operate in “contested airspace”, carrying out reconnaissance, target acquisition and precision strikes while reducing risk to aircrew. The goal is to boost the “lethality and survivability” of Apache helicopters while sharply lowering maintenance and logistical demands.

The MoD plans to spend around £100 million over the next two years on the initial design phase alone, a sign of the urgency created by the widespread use of autonomous drones in the Russia-Ukraine war, which has transformed military expectations around unmanned systems.

Anduril, founded in 2017 by Palmer Luckey, the tech entrepreneur who previously created Oculus VR, has rapidly become one of the most in-demand defence suppliers in the US, championing AI-enabled, low-cost autonomous technology at scale. Its surge in valuation over the past year reflects soaring global demand for autonomous defence systems.

Luckey has been outspoken about the moral case for using advanced AI to reduce civilian casualties and improve decision-making. “When it comes to life-and-death decisions, it is too critical an area not to apply the best technology available,” he told Fox News. “If you’re talking about killing people, you must minimise collateral damage and be as effective as possible.”

Anduril has spent the past two years expanding its UK footprint, establishing partnerships with domestic engineering firms including Atom Performance Technologies, Flarebright, Olsen Actuators and Isembard. The company claims its UK supply chain already supports 50,000 jobs, and the new Isle of Wight development would deepen those ties further at a time when the UK is set to increase defence spending to £73.5bn by 2028.

Dave Bond, senior vice-president of defence technology at GKN Aerospace, hailed the move as a “hugely exciting partnership” that will bring “all-new defence solutions to the field in rapid time”.

Local leaders welcomed the announcement as a boost for advanced manufacturing on the Isle of Wight. Richard Quigley, MP for Isle of Wight West, said the partnership “demonstrates that innovative, high-tech defence capability is being developed right here”, helping to secure local jobs and build critical engineering skills.

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US defence giant eyes Isle of Wight for next-generation fighter drone production

Businesses are preparing to sharply increase their investment in artificial intelligence next year, even as concerns around data privacy, regulatory compliance and security risks continue to weigh heavily on IT leaders.

New research from enterprise content management platform Storyblok shows that nine in ten companies plan to raise their AI budgets in 2026, with more than half expecting a “significant” uplift. Only 2% anticipate cutting their AI spending.

The survey of 200 senior IT and procurement professionals, all responsible for AI deployment within large organisations, suggests that despite market jitters about an AI bubble, corporate appetite for automation and generative tools remains strong.

According to the report, 39% of respondents say AI is now “fully integrated” across their organisation, while a further 39% describe their readiness as “mature”. Just 7% consider themselves still at the “piloting’’ stage, signalling a rapid shift toward enterprise-wide AI implementation.

Leaders also expect clear financial and operational returns. Over half cited operational efficiency as the strongest benefit of AI adoption, followed by faster time-to-value, enhanced employee productivity, and improved decision-making.

Yet this enthusiasm is tempered by growing anxiety about governance and risk. The top obstacles to successful AI adoption were: Data privacy and regulatory concerns (61%), Security risks (58%) and Legacy technology restrictions (43%).

When asked what would most improve their confidence in adopting AI, respondents emphasised stronger data governance, better system integration, and greater transparency from technology vendors. Only 12% said pricing was a priority, a sign that cost is currently a secondary concern compared with compliance and security.

Generative AI will reshape content management — but most firms aren’t ready

An overwhelming 91% of respondents believe generative AI will transform content management within their organisations. However, despite this confidence, adoption of Generative Engine Optimisation (GEO), increasingly crucial as AI-driven search reshapes marketing, remains limited.

Only 23% have a fully integrated GEO strategy, while 41% are either in the early stages or have yet to begin adapting their content for AI search engines.

Dominik Angerer, Storyblok’s CEO and co-founder, said the findings reflect a period of optimism mixed with realism: “Budgets are growing robustly, AI adoption is maturing fast, and confidence in AI’s return on investment is rising. But concerns around security, governance and regulatory compliance are likely to intensify and could inhibit adoption in the short to medium term.”

He added that while almost all organisations recognise AI’s power to reinvent content management, few have yet retooled their systems or strategies accordingly.

“AI search is upending marketing, yet less than a quarter of businesses have adapted. There’s a pressing need for new AI platforms and tools to help organisations regain confidence in their content.”

With firms preparing to double down on automation while wrestling with governance and security fears, 2026 is shaping up to be a defining year for enterprise AI — one where investment momentum will collide with the realities of risk, regulation and readiness.

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Businesses plan major AI investment surge for 2026 – but security and privacy fears threaten progress