The FLA’s Industry Outlook Survey gauges senior executives’ views across the asset finance, consumer finance and motor finance markets about the outlook for the UK economy and the markets they represent. The Q2 2026 survey results are based on responses received from 83 FLA member finance companies from 26 May 2026 to 7 July 2026.
Overview
The Q2 2026 Industry Outlook Survey highlights the industry’s resilience despite a challenging economic and regulatory environment. Respondents identified domestic political uncertainty, geopolitical tensions in the Middle East and ongoing regulatory developments as key risks, with implications for inflation, investment decisions and consumer confidence. Reflecting these challenges, 61% of respondents expected UK economic conditions to deteriorate over the next 12 months, although the majority (55%) expected only a slight deterioration.
Despite the challenging backdrop, respondents remained broadly positive about growth prospects. Almost two-thirds (63%) expected new business volumes to increase over the next 12 months. Underlying demand for finance was expected to remain resilient, supported by refinancing activity, replacement cycles and ongoing funding requirements among businesses and consumers.
Technology was viewed as a key growth enabler. Respondents highlighted continued investment in AI, automation and digital customer journeys to improve efficiency, strengthen credit decisioning, enhance customer outcomes and support business growth.
Overall, the findings highlight an industry that remains cautious but adaptable. While external pressures are expected to persist, respondents emphasised the importance of disciplined risk management, operational resilience, prudent credit assessment and continued investment in technology to support customers and capture growth opportunities in a more uncertain environment.
In detail
The Q2 2026 survey results showed an improvement in sentiment compared with the Q1 2026 survey, although respondents remained cautious about the outlook for the UK economy. The proportion of respondents who expected some improvement in economic conditions over the next year rose sharply from 6% to 27% between the two surveys (Fig. 1).
The Q2 2026 survey indicated that expectations for new business growth remained resilient overall. The share of respondents expecting an increase in new business over the next 12 months was broadly unchanged at 63%, compared with 64% in Q1 2026 (Fig. 2).
Source: FLA Industry Outlook Survey Q2 2026
Source: FLA Industry Outlook Survey Q2 2026
Funding sentiment remained cautious in Q2 2026, although concerns centred more on the cost of funding than its availability. Most respondents (66%) expected funding availability to remain unchanged over the next 12 months, up slightly from Q1 2026, while the proportion expecting an improvement increased from 19% to 24% (Fig. 3).
The Q2 2026 survey results pointed to a broadly stable employment outlook among member companies. The largest share of respondents (46%) expected employment levels to remain unchanged over the next 12 months, up from 40% in Q1 2026 (Fig. 4).
Source: FLA Industry Outlook Survey Q2 2026
Source: FLA Industry Outlook Survey Q2 2026
The outlook for arrears improved slightly in Q2 2026, but respondents continued to expect upward pressure on customer repayments. Overall, 63% of respondents expected the number of customers in arrears to increase over the next 12 months, down from 67% in Q1 2026 (Fig. 5).
The Q2 2026 survey showed a modest improvement in expectations for insolvencies, although respondents continued to anticipate some deterioration over the next 12 months. For business insolvencies, 79% of respondents expected an increase, down from 87% in Q1 2026 (Fig. 6).
Source: FLA Industry Outlook Survey Q2 2026
Source: FLA Industry Outlook Survey Q2 2026
Expectations for personal insolvencies followed a similar pattern. The proportion of respondents expecting an increase fell from 86% in Q1 2026 to 78% in Q2 2026, with most anticipating only a slight rise. Meanwhile, the share expecting no change increased from 12% to 20% (Fig. 7).
Expectations for retail motor dealership insolvencies improved in Q2 2026. The proportion of MFD respondents expecting an increase over the next 12 months fell from 75% in Q1 2026 to 61%, with all respondents anticipating only a slight rise. The remaining 39% expected no change (Fig. 8).
Source: FLA Industry Outlook Survey Q2 2026
Source: FLA Industry Outlook Survey Q2 2026
The Q3 2026 Industry Outlook Survey will be published in October 2026.