Business confidence amongst UK CEOs is growing, despite ongoing geopolitical and economic challenges, according to the latest EY-Parthenon CEO Outlook survey.

The survey, taken from 100 UK CEOs in order to track capital allocation, investment and transformation strategies, found 82% now feel at least somewhat optimistic about the business landscape over the next twelve months, an increase from 67% since September 2024.

According to the findings, UK chief execs now have more confidence in their firm’s performance, with more than three-quarters (78%) hopeful about revenue growth, 80% optimistic about increasing profitability, and 77% being assured in their position as a competitive force.

The survey found that business leaders plan to undertake more transformation initiatives over 2025, prioritising improving customer engagement and retention (45%), sustainability targets (43%), and optimising operations through digitisation and productivity (43%).

Almost one-in-five (19%) said they need to increase the speed of transformation, while 18% said they will focus on improving transformation outcomes through collaboration across functions and the C-suite.

However, despite these optimistic plans, CEOs see significant challenges on the horizon, especially in regards to shifts in compliance, with 71% reporting that rapid technological advancements, evolving sustainability agendas, and geopolitical tensions will clearly separate industry leaders from those finding it difficult to keep up.

Internal pressures will also impact how businesses navigate the next twelve months, with almost a quarter of CEOs (24%) reporting that cost and return on investment will influence their organisation’s approach to digital transformation initiatives.

“Our latest CEO Outlook reflects a resilient and forward-thinking mindset among UK CEOs,” said Silvia Rindone, EY’s UK&I managing partner for strategy and transactions.

“However, with nearly a quarter citing cost and ROI as key factors in shaping their digital transformation strategies, it’s clear that businesses are seeking a balance between innovation and sustainable growth.” 

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That growth might also come from other avenues, with 99% of UK chief executives saying that they expect to actively pursue dealmaking initiatives over the next year.

Of these, 62% said they will be looking at M&A – up from 40% in September 2024 – while around three in five (62%) intend to pursue joint ventures or strategic alliances with third parties, and 45% will consider divestments, spin-offs or IPOs.

The UK also remains the top destination for capital investment, with 52% of CEOs planning to invest domestically over the next year, a sharp difference compared to those planning to invest in the US (20%), France (18%), Germany (16%), and Switzerland (14%), which were all identified as key investment locations.