UK business investment growth eased to 2.7% year-on-year in the final reading, down from 3.2% previously, a 0.5 percentage-point slowdown that marks a roughly 15.6% deceleration in the pace of expansion. While investment remains higher than a year ago, the data confirm a modest loss of momentum compared with the prior period.
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However, the 2.7% outcome comfortably beat analysts’ 0.7% forecast, signaling a more resilient corporate spending backdrop than expected and supporting a constructive tone for UK equities. Capital-goods manufacturers, industrials, and business services stocks stand to benefit most as stronger investment underpins order books and earnings visibility. The upside surprise also supports a more positive medium-term growth narrative, which may temper the urgency for aggressive policy easing expectations in markets.