1 in 3 business leaders report direct financial harm from policy U-turns and changes

Bradshaw Advisory’s first-of-its-kind UK Political Risk Report 2026 reveals how political uncertainty is having a major impact on the bottom lines of British firms.

1 in 3 (32%) business directors report that ‘u-turns’ (policy reversals or major changes in guidance) over the past 12 months have led to major impacts or material costs to the business. This rises to 39% of businesses in the financial sector, 38% of those in hospitality and 36% in the tech sector. 

Almost 2 in 3 (64%) of business directors say that the way potential policies were trailed at the budget created undue uncertainty for them.

A majority of businesses leaders believe that the levels of ‘political risk’ they face are going to get worse, not better under Labour. Almost nine in ten report taking some form of action in response.

Political risk in the UK is forcing a range of major strategic decisions across the economy, showing splits on how boardrooms should respond to Labour’s first year in power, and the dramatic rise of new challengers, Reform UK. 

• Capital-intensive sectors like energy and utility bosses are one of the most likely sectors to cut staffing (30%). With almost 1 in 4 (23%) scaling back planned investment.

• One in five built environment firms (20%) are delaying UK investment;  24% are scaling it back in response to expected public policy decisions; 27% say political risk is driving reductions in staffing levels.

• 39% of financial services firms are more likely to bringing investment plans forward and hire staff (27%). 

• Labour intensive sectors like consumer firms are more likely to cut staff (25%) than to cut capital investment levels (15%). 

Since it took office in July 2024, it is estimated Keir Starmer’s Labour government has performed at least thirteen policy u-turns. According to the Economic Policy Uncertainty Unit, 2025 was the UK’s most sustained period of uncertainty since the modern index began in 1998.

Despite this, in the short term businesses want stability, not a Labour reset. Half of businesses (48%) think a change of leader in the Labour Party would pose a risk to their business with 1 in 10 (10%) seeing it as a major risk. 

Business directors, who were asked in the poll to vote on behalf of their business, are on course to vote for the Labour Party. 24% say they would vote for a Keir Starmer-led Labour Party, with 10% preferring a Labour Party led by someone else. Just under 1 in 4 (24%) directors say they would vote Reform followed by the Conservatives on 18% and the Liberal Democrats on 13%. 

Beyond this, businesses are increasingly looking at the potential of Reform UK.  Business leaders split evenly between a Starmer-led Labour Party and Reform UK on 24%. This underlines how unsettled the political landscape has become for business and shows that Reform’s rise is not confined to public opinion polls but is now reaching boardrooms.

These findings are part of a major report on political risk from Bradshaw Advisory launched to an invite-only audience in the City of London on Wednesday 4 February. 

Tom Lees CEO and Founder of Bradshaw Advisory says:

“Political risk is shaping major decisions in boardrooms. Businesses are having to think through an array of uncertainties, and it’s shaping when and how they invest in the UK economy,  if they frontload or pull back, and if they hire or fire.

“For Labour, the lesson seems to be that continuity and stability matters. There’s little appetite for a change of leader, possibly because businesses are worried about who might replace him. They’d rather Starmer stays, but gets a firmer handle on the government’s agenda: have a clearer more business friendly plan, communicate it better, and deliver as promised.

“It’s also clear that Reform UK are a serious problem for Labour - neck-and-neck with Labour under Starmer. Their narrative about poor state capacity seems to chime with the risks felt by businesses. They’ve boosted their credibility with new appointments like Nadhim Zahawi, and they’ve been on a charm offensive with business that seems to be cutting through.”