UK companies are moving away from across-the-board cost cutting and towards a more targeted phase of cost optimisation, according to new data from Soldo, as firms selectively increase spending in areas seen as critical to growth and productivity.

Soldo’s Spending Trends Spring Index 2026 shows that total business spend rose in 2025 in categories such as travel and technology, even as advertising budgets were sharply reduced. The pattern suggests companies are reassessing where money delivers the greatest return, prioritising operational effectiveness and revenue generation over brand-led investment.

Travel and entertainment (T&E) spending in the UK rose by 12 per cent year on year in 2025, with a stronger rebound among large businesses, where spend increased by 17 per cent. Smaller companies recorded more modest growth of 8 per cent, highlighting a divergence in confidence as larger organisations lead the return to in-person sales activity, client delivery and internal collaboration.

The recovery in travel comes despite continued economic uncertainty and follows several years of constrained budgets. It also mirrors a broader European rebound in business travel, according to the index.

Technology spending, particularly on artificial intelligence, continued to grow even as other discretionary budgets came under pressure. Across Europe, companies increased spending on AI tools in 2025, with a notable shift away from general-purpose platforms towards more specialised applications.

Average spending on AI-native coding and workflow tools rose sharply during the year, with products such as Cursor and Anthropic seeing rapid uptake. The trend points to wider adoption of AI across technical and operational teams, as businesses prioritise tools that support productivity, automation and faster execution.

By contrast, UK advertising spend fell by 28 per cent in 2025, one of the steepest declines across major spending categories. Investment in paid media, marketing and market research was cut back as firms redirected resources elsewhere.

At the same time, day-to-day operational spending continued to expand. Spending on shopping, food, services and transport rose across the year, contributing to a 16 per cent increase in operational spend. These low-value, high-volume purchases now account for nearly two-thirds of all UK business transactions, reflecting a more decentralised spending environment.

Sacha Herrmann, chief financial officer at Soldo, said companies were becoming more deliberate in how they allocate capital. “UK businesses are no longer cutting costs indiscriminately,” he said. “They are making selective investments in travel and technology to modernise operations, while pulling back in areas like advertising. As spending becomes more decentralised, maintaining visibility and control at speed is increasingly critical.”