UK Growth Hides a Two-Speed Economy Beneath Stable Headlines

Authored by NatWest’s chief economics team, this February briefing examines how headline stability in the UK masks widening divergences across households, firms, and capital flows.

• Household balance sheets remain cautious, with saving prioritised over spending, while SMEs continue to struggle even as larger firms and services show renewed momentum.

• Credit conditions are uneven: business lending is strengthening, but consumer credit growth has softened despite steady spending.

• Investment patterns are re-wiring, with UK FDI stagnating overall even as energy transition investment accelerates and capital shifts toward the Americas and Asia.

What does this growing dispersion imply for UK growth durability in 2026? The full report digs beneath the averages to unpack the risks and opportunities.