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UK Mid-Market Shows Steady Growth Amid Challenges
In the third quarter of 2025, the UK mid-market showcased impressive resilience, managing to sustain solid growth despite the backdrop of fluctuating economic conditions. According to the latest data from NatWest’s Mid-market Growth Tracker, which has recorded more than four-and-a-half years of increasing output levels, this segment remains a significant force within the UK economy.
The report highlights that service providers have been particularly instrumental in driving business activity growth during September. This uptick in activity comes alongside a noticeable easing in input cost inflation, which has bolstered optimistic growth expectations among mid-market firms.
Managing Challenges in a Volatile Environment
Though this report indicates a positive trend for mid-market businesses, the landscape for small and medium-sized enterprises (SMEs) remains challenging. The NatWest SME Business Activity Index displayed a slight decline in business activity, slipping from 47.1 in August to 46.9 in September. Notably, SMEs across the construction and manufacturing sectors reported significant declines in output, while service industries experienced only moderate contractions.
As recognized by NatWest’s Chief Economist, Sebastian Burnside, the recent fluctuations in UK business confidence resemble a “rollercoaster ride.” He emphasized the importance of keeping a pulse on domestic and international market changes, noting that it’s encouraging to see business cost pressures begin to subside.
Path to Recovery: Indicators of Improvement
Despite these challenges, signs of improvement are noticeable. While new orders for SMEs decreased, the rate of this decline was the least severe seen in 2025 thus far. Furthermore, Andy Gray, Managing Director of Commercial Mid-Market at NatWest, acknowledged the adaptability of the UK’s mid-market firms in navigating through mixed market conditions. His remarks underline the importance of remaining committed to identifying growth opportunities amidst adversity.
Looking ahead, the ability of mid-market firms to endure fluctuating conditions while focusing on strategic responses to cost pressures could pave the way for a stronger 2026. With persistent optimism, although slightly diminished from August’s highs, firms in this sector continue to express confidence in their prospects for the near future.
Conclusion: Encouragement for Entrepreneurs and SMEs
As we close out Q3, there is a tangible sense of hope and resilience among UK mid-market businesses, even amid fluctuating conditions. Entrepreneurs and SME owners can draw inspiration from these findings, as adapting to challenges, combined with optimism for future growth, appears to be the way forward. It’s essential for all businesses to remain vigilant and proactive, as opportunities can emerge from adversity.
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