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Reasons to be Cheerful: Is the UK economy turning?

  • Writer: Charlotte Gorse
    Charlotte Gorse
  • Aug 28
  • 2 min read

While summer holidays offer pause for thought, there may be reasons to be optimistic for the UK economy this August. Could business confidence be returning? Might leaders be able to align recent positive storytelling with intelligent investments in higher education?


Going into the new academic year and looking over a range of sources this month, one can begin to see how universities might leverage individual institutional appeal with market differentiation. Consider the following:


  • After many years of contraction, there is now growth to UK economic productivity (+1.1% over the last 2 years) according to the Resolution Foundation. Morgan Stanley projects this might be nearer to +1.8% in the private sector.


  • This positions the UK as the joint fastest-growing economy in the G7, with UK consumer confidence at a two-year high. Reversing an economic trend in place since the 2008 financial crisis is no mean feat, and could support more investment, more jobs and rising living standards.


  • Despite a drop in graduate jobs impacted by AI, the CBI’s recent report ‘The Adoption Decade' presents a clear call to action to support wider digital transformation and for skills gap remedies to foster further growth potential. CBI analysis suggests that the UK can move further, potentially able to mirror the 2-5% GDP US growth thought to be due to wider AI adoption.


  • Inclusion of the recent CEO Agenda 2026’s findings shows that while 67% of global CEOs are actively exploring or piloting AI (across a range of business process areas and sectors), only a further 13% are scaling and integrating AI across the business.


  • The CBI intimates that this is due to HR skills gaps across the workplace (at all levels, including graduate and up to leadership). It cites recent DSIT findings: only 21% of UK people in work feel confident using AI tools in the workplace and 84% of UK workers report no AI-related training in the past year (2024). When triangulated with the first annual Skills England report, it is possible to envision priority sector skills and subjects ripe for development.


  • With c.1m young people NEET (not in education, employment or training), and those young, disadvantaged and lacking qualifications more than twice at risk, £1bn of UK government investment is committed to deliver skills in priority sectors.


  • According to Skills England, these Top Priority Skills needs are currently projecting growth by 2035 to:


    Clean Energy (+70.6%)

    Defence (+58.1%)

    Life Sciences (+44.0%)

    Adult Social Care (+27.5%)

    Digital Technologies (+27.3%)

    Creative Industries (+26.9%)

    Construction (+26.2%)

    Financial Services (+22.5%)


While there are many challenges ahead for workplace and digital transformation, it may be possible to move as a leader into distinctive and contemporary education and training offers which support:

  • NEET and young student attraction, retention and success;

  • mature student upskilling and career change (incl. flexible learning);

  • graduate employment (across long, short and work-relevant education);

  • corporate training and CPD (and workforce capability gaps).


Working strategically across tertiary education into professional training, keeping a keen eye on business needs and employment opportunities can holistically transform futures for all and ultimately deliver on success and growth.


#UniversitiesUK #UKeconomy #HigherEducation #skillsgaps

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