UK CEOs adapt investment strategies in response to geopolitical policy shifts

Most UK CEOs have had to adapt their strategic investment plans over the last 12 months in response to geopolitical and trade policy developments. According to EY-Parthenon’s CEO Outlook Survey, a third delayed planned investment, with serious impacts on the firms downstream of their supply chain.

Silvia Rindone, managing partner for EY-Parthenon in the UK and Irelands, commented, “UK CEOs are recalibrating their strategies, demonstrating remarkable resilience and adaptability, while also showing a willingness to make bold decisions in the face of ongoing geopolitical and economic uncertainty. Business leaders must continue to act purposefully in the year ahead by scaling up innovation and investing in their workforce to unlock new opportunities and drive value creation.”

The survey of 100 UK CEOs found that 78% have altered their investment strategies, with 32% delaying a planned investment, 31% accelerating a planned investment and 9% stopping an investment due to geopolitical or trade policy developments.

In contrast, when EY-Parthenon polled global business leaders, many more seemed upbeat on their outlook. A 40% chunk said they had actually accelerated a planned investment, ahead of 31% who had postponed.  

Despite feeling a more uncertain economic and geopolitical environment, however, nine in 10 UK CEOs are feeling confident about their company’s prospects for the next 12 months with 89% expecting profitability growth in 2026, although 47% anticipate increases in operating costs. In part, this seems to be driven by optimism over technological developments – something that has been powering optimism repeatedly in recent years.

To that end, EY-Parthenon’s survey found that 57% of UK respondents were currently undergoing a significant enterprise-wide transformation initiative, whilst 41% are planning to start in the next 12 months. Meanwhile, 51% of CEOs were using a transformation initiative to improve their customer engagement and retention.

The largest part of this remains investment in AI and emerging technology, with 96% of UK respondents saying they would be investing in emerging technology in the next 12 months – ahead of the 92% confident in AI investments in the global poll – with 40% believing that investment in AI will be critical for their organisation to adapt in a shifting geopolitical and economic environment. Respondents were also optimistic about their ability to attract and retain talent, with 62% believing that investments in AI will help them to maintain current levels of employment or hire new talent over the coming year.

However, whilst 9 in 10 said they believe AI will have either a transformative or significant impact on their business model or operations in the next two years, they are also facing challenges when it comes to AI adoption. And 36% said they are concerned with rising cyber risks, followed by high up-front running costs (23%).

Rindone concluded, "While there is excitement surrounding the potential of AI, the reality for CEOs is far more nuanced. It is essential that business leaders adopt a pragmatic approach that acknowledges the transformative impact of AI while also addressing challenges such as cybersecurity risks, the regulatory landscape, and upskilling their workforce.”