The United Kingdom has reinforced its status as a premier destination for international capital over the past year, even as confidence among its business leaders has sharply declined. According to the latest annual survey from professional services giant PwC, Britain held onto its position as the world's second-most attractive investment location for chief executives.
Global Competition Intensifies
The UK now shares its runner-up spot with both Germany and India, with each country cited by 13% of global CEOs as a key target for investment in the coming year. This represents a subtle shift from the previous year, marking a one percentage point drop for the UK and a corresponding rise for Germany.
India saw the most significant leap, climbing from 7% to 13%. The United States continues to dominate, firmly holding the top position with 35% of chief executives naming it the most attractive destination. The UK's ability to maintain its high ranking comes against a backdrop of rising economic uncertainty, with a quarter of UK-based CEOs expecting the domestic economy to contract over the next twelve months, nearly double the proportion (13%) who held that view in 2025.
A Wake-Up Call for the UK
Marco Amitrano, Senior Partner at PwC UK, commented on the findings. "Being the world's second-most important investment destination for a second-year running should not be underestimated," he said. "It demonstrates that the UK still looks stable in a turbulent world. But in now sharing that position it's also a wake-up call—other countries are gaining ground."
Amitrano emphasised the need for concerted action, stating that as a leading nation, the UK must "step up our game, with government and business working together." He pointed to falling inflation as a potential foundation to "help lay the groundwork" for supporting growth sectors.
The UK has actively worked to bolster its global standing through new trade agreements, including the landmark UK-India Free Trade Agreement signed in July, designed to cut tariffs on goods like whisky and cars. However, the benefits of the UK-US economic partnership, which provided tariff relief on UK steel, are now under scrutiny following recent tariff announcements from the Trump administration.
AI Investment Soars, But Returns Lag
British businesses are prioritising technological advancement, with over 80% of UK CEOs citing increased investment in technology, AI, and data as a top priority, a significant rise from 60% last year. Globally, 40% of business leaders believe AI investment is essential to meet their strategic goals.
Despite this commitment, tangible returns remain elusive. Only 21% of UK firms reported revenue growth from AI investments in the last 12 months. While this figure is lower than the global average of 29%, UK companies also admitted to incurring lower related costs than their international peers.
Confidence in Revenue Growth Craters
Perhaps the most striking finding from the survey is the dramatic fall in CEO optimism. Globally, just 30% of chief executives express confidence in their company's revenue growth for the next year, down from 38% in 2025 and 56% in 2022. In the UK, this figure stands at 38% for high confidence—a five-year low.
UK bosses attributed their short-term pessimism to "bureaucracy and cumbersome structures" that stifle innovation and hamper business performance. This friction is also impacting merger and acquisition activity, with only two-fifths of UK leaders anticipating deals in the next 12 months.
"The speed of tech change is exposing excessive bureaucracy and overly rigid structures, things that can hamper transformation at pace," Amitrano added. "Those sources of friction are reasons preventing businesses getting important early returns on their investment in AI, slowing down its effectiveness."
Looking further ahead, there is slightly more optimism, with 51% of UK CEOs predicting revenue growth over a three-year horizon. The challenge for the UK now is to translate its enduring investment appeal into the business confidence and agility needed to drive future growth.
