A third of businesses plan to invest in artificial intelligence tools in 2026 as part of plans to grow and improve productivity, research from Lloyds Bank has found.

According to Lloyds’ business barometer, the top priorities for UK businesses are improving productivity, upskilling their teams and strengthening technological capabilities, which they say requires extra support if they are to achieve their goals for the next 12 months.

The survey of 1,200 firms also found that 35 per cent of businesses plan to invest in team training next year to take advantage of emerging growth opportunities in an “increasingly fast-paced market”.

Paul Kempster, managing director for commercial banking coverage, Lloyds Business & Commercial Banking, said: “These are investment priorities that will support businesses’ long-term growth, helping them capitalise on new opportunities that arise in the year ahead, but also build a firm foundation well beyond 2026.”

Earlier research published by the bank in June found that AI had increased productivity for most firms, as 82 per cent had reported, and boosted profitability for 76 per cent of the businesses that were using it.

Productivity benefits were seen most widely among retailers, with 84 per cent saying so, while 79 per cent of manufacturers reported a positive impact on profitability.

However, uptake of AI and digital investment was limited by barriers such as the cost of the technology, a lack of AI-specific skills and concerns over data privacy and energy consumption.

Even so, 56 per cent of businesses said that they plan to make new investments in AI over the next year and 25 per cent of those who had not yet implemented it had plans to use it.

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The business barometer, which has been published monthly since January 2002, reported an increase in confidence in December, based on the views of the surveyed companies on business prospects and optimism in the UK economy. Business confidence increased by five percentage points to 47 per cent in December, up ten points since the start of the year.

Optimism towards the wider economy reached a four-month high, up 11 points to 42 per cent. There was an expectation that prices would continue to fall, with a net balance of 59 per cent of companies agreeing. This optimism helped to offset a slight dip in expectations about their own trading prospects, which fell by one percentage point to 52 per cent.

However, the anticipation of falling prices has affected shoppers’ behaviour with early indicators pointing to a subdued performance on December 20, the Saturday before Christmas, when in-store footfall was down 6.9 per cent year on year, according to Sensormatic Solutions.