The first full week of 2026 brought a mixed picture for UK small businesses. Markets were optimistic — the FTSE 100 briefly broke the 10,000 mark — but the reality on the ground is more complex. Confidence is soft, costs remain elevated, and many SMEs are operating with thin or no cash reserves. At the same time, AI adoption is accelerating, and new regulatory expectations are beginning to shape how businesses plan for the year ahead.