This comes out of a recent Zoho Digital Health Study, which found that 39% of UK businesses surveyed said they struggle with inflation, and consider it their top concern beyond their control. 

The study’s release follows the latest economic update from the Office for National Statistics, indicating a 0.3% contraction in the economy in October.

Despite this, over half (55%) of respondents said they believe the UK has surpassed the worst of the macroeconomic factors affecting business. However, with inflation currently sitting at 4.6%, which is above the government’s 2% target, almost half (45%) of businesses are still troubled by the economic outlook. 

“Business confidence has taken a beating over the past few years, so it is no surprise that many are still concerned about the stability of the UK economy. Quite rightly many are looking to future-proof their businesses against the economic permacrisis which continues to create turbulence,” said Sachin Agrawal, managing director of Zoho UK.

That being the case, 68% of businesses said they had to curtail tech investment this year due to the rising interest rates, however, companies say they still plan to channel investments into into crucial areas such as customer experience (CX), employee experience (EX), artificial intelligence (AI), and data privacy.

“Companies that invest in the right technology will enjoy a strong return on investment while those who ignore the importance of digital transformations will risk becoming stagnant,” commented Agrawal.

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This is because they recognise the benefits of investing in technology that promises a solid return on investment. For instance, 67% of respondents are either currently using AI or planning substantial investments in it.

“As just 19 per cent of UK companies were found to have good digital health, it should come as a wake-up call to consider the huge impact digitisation can have on business performance,” Agrawal said.

“In an increasingly tough market, with increased competition, increased customer and employee demand and a myriad of negative external market-forces driving economic stagnation, digitisation must be a focus. The risks are too high to ignore.”