With the Autumn Budget approaching and fears of further tax rises building, new research from Menzies warns that UK businesses are trapped in an “agility crisis” that could hinder economic recovery.
According to The Agile Advantage report — based on a survey of more than 500 senior decision-makers in mid-to-large-sized organisations — 80% of companies say they are finding it difficult to adapt to a mix of rising costs, shifting policy, and rapid technological change. Nearly one in five (18%) admit they have already missed out on a major opportunity in the past year because they were too slow to act.
A further 21% say they are too focused on responding to immediate threats rather than identifying new opportunities, while 36% cite cash flow and budgeting difficulties as the most significant obstacles to agility.
Access to capital is a growing concern. Almost a third (32%) of respondents say a lack of government grants has slowed progress in the past two years, while 27% point to limited private equity availability, 25% to restricted bank lending, and 23% to difficulties securing venture capital.
Sector-specific challenges are most pronounced in transport and logistics, where 52% say poor cash flow is a critical barrier, and in property and construction, where 49% report the same.
With the Budget expected in late November, nearly one in three (31%) respondents say clearer regulatory guidance would help them respond more effectively to change. One in five (20%) warn that reduced access to R&D tax credits is actively holding their organisations back. Broader economic stagnation remains the single biggest perceived threat for 30% of businesses over the next 18 months, followed by increased regulation (24%) and the Employment Rights Bill (13%).
Menzies’ research also finds that leadership and people-related factors account for eight of the top ten barriers to organisational agility. Conflicting leadership views, short-term goals, and poor communication are among the leading internal blockers cited by respondents.
Simon Massey, Managing Partner at Menzies, said: “Right now, too many UK businesses are stuck in ‘wait and see’ mode — waiting for the Budget, waiting for the economy, waiting for international politics to settle. But as our research shows, the result is that too many are missing the opportunity to innovate and grow.”
He added: “Businesses can’t control what’s going to be in Rachel Reeves’ red box, but they can control how resilient, agile, and prepared they are for whatever may be around the corner. There’s no secret to business agility, but it’s near impossible if a business doesn’t have a clear destination and a direction of travel understood by every level in the organisation.”
Menzies’ report concludes that many companies are cutting back on international expansion, recruitment, and digital transformation spending as they brace for further economic uncertainty — a pattern that could deepen if agility challenges persist into 2025.
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