#London #United Kingdom #Bain & Company #BritishAmerican Business #Transatlantic Confidence

Fragile Recovery in Transatlantic Confidence

The latest findings from the 2026 Transatlantic Confidence Index, conducted by BritishAmerican Business (BAB) and Bain & Company, indicate a subtle improvement in investor sentiment in the business corridor between the US and the UK. The new Index score stands at 6.7 out of 10, a modest rise from the record low of 6.6 reported the previous year. This report reflects perceptions from 74 leading transatlantic companies and sheds light on the cautious optimism beginning to surface in the wake of last year's sharp drop.

US Companies Show Slightly Improved Confidence in the UK

The confidence level among US companies operating in the UK increased slightly, moving from 6.3 to 6.4. Despite this minor recovery, the atmosphere remains filled with trepidation. Investors have voiced ongoing concerns regarding the UK’s tax regime, regulatory landscape, and high energy costs—which were recently included in the survey for the first time. 35% of participating US businesses identified a flexible and predictable regulatory environment as their top priority, stressing the need for a more competitive investment climate.

The Transatlantic Confidence Index emphasized the critical importance of regulatory reform and the establishment of a clear industrial strategy. A staggering 92% of US respondents rated the implementation of a pro-growth agenda—vital for future investment in the UK—at seven out of ten or higher.

UK Investors' Perspective on US Market

On the flip side, the confidence level of UK businesses regarding the US market showed a more substantial rebound, improving from 7.5 to 8.1. This notable increase suggests that UK investors still recognize the inherent strengths of the US market, including robust access to capital and talent. Furthermore, UK leaders rated their confidence in US innovation at an impressive 8.5 out of 10.

These sentiments are reflected in the investment intentions of UK firms, with 86% planning to expand investments in the US significantly. However, concerns related to the US's political stability and trade policies were prevalent among UK respondents, emphasizing the importance of maintaining strong economic relationships.

Challenges and Opportunities Ahead

Despite the apparent resurgence in confidence, serious challenges linger. The net attractiveness score for the UK's political stability fell sharply from +37 to -12 over the past year, as political leadership change loomed. The decline in confidence in the UK-EU relationship also warrants attention, dropping to 6.2.

Duncan Edwards, CEO of BritishAmerican Business, commented on the findings, highlighting that while US companies are still eager to invest in the UK, they are increasingly vocal about the hurdles that exist. Issues surrounding tax, regulation, and energy costs are perceived as major impediments to the UK's competitiveness on the global stage. A call for more predictability in forthcoming budgets was made by industry stakeholders, underlining the need to foster an inviting climate for investments.

Jonathan Frick, a partner at Bain & Company, underlined the resilience of the transatlantic corridor, acknowledging that companies are committed to investing despite the challenges posed by external factors. He reiterated the vital industries’ fundamentals—cost, regulation, access to talent, and policy predictability—will play an essential role in shaping investment decisions in the future.

As we move forward, both US and UK businesses will need to collaboratively address these challenges, ensuring that the transatlantic economic relationship not only stabilizes but flourishes. The outlook remains precarious, and it is clear that significant strides are required for both sides to unlock the full potential of their economic partnership.