Local government will play a decisive role in the UK’s economic performance in 2026 as business growth becomes increasingly shaped by geography, sector strength and the quality of support within council areas, according to a new analysis.
The Growth Outlook 26 study assessed more than 4.3 million UK businesses and found that just 9% are forecast to grow by 20% or more next year, down from 16% in last year’s analysis.
Published by Growth Flag, the report found that while the pool of high-growth firms is shrinking, scaling businesses are thriving in specific council areas across every UK nation.
Four of the UK’s top 10 locations for scaling firms sit outside London and the South East, including Perth and Kinross, Telford and Wrekin, Solihull and Moray.
The findings also highlight widening variation within regions, driven by differences in skills, infrastructure and business support.
Richard Jeffery, co-founder of Growth Flag, commented: ‘It is local leadership and targeted action that will drive results. Councils that understand their business base, build strong partnerships and focus on firms with the capacity to scale will be best placed to unlock prosperity in their communities.’
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