The United Kingdom’s technology sector expanded by 4. Related: Nine in ten UK small businesses accelerate digital adoption plans for 2026.8 per cent in the second quarter of 2026, outpacing every major European economy and reinforcing London’s position as the continent’s leading tech hub, according to new data released by the Digital Economy Council.
Venture capital investment into British tech firms reached £7.2 billion between April and June, a 12 per cent increase on the same period last year. The figures put the UK comfortably ahead of Germany, which recorded £4.9 billion, and France at £3.1 billion.
“What we are seeing is a compounding effect,” said Dr Elaine Mortimer, senior economist at the Centre for Digital Innovation. “The ecosystem in cities like London, Manchester, and Edinburgh has reached a density where talent, capital, and infrastructure reinforce each other. It becomes self-sustaining.”
Fintech remained the dominant sub-sector, attracting nearly a third of all investment. However, analysts pointed to strong showings from climate tech and artificial intelligence startups, both of which doubled their funding compared to the previous quarter. AI companies alone accounted for £1.8 billion of the total.
The employment picture tells a similar story. Tech job vacancies across the UK rose to 168,000 in June, up from 143,000 in January. Software engineers, data scientists, and cybersecurity specialists remain the most sought-after roles, with average salaries climbing 6 per cent year on year.
Industry groups cautioned that the growth is not without headwinds. The ongoing shortage of experienced developers continues to push up costs, and some investors have expressed concern about stretched valuations in early-stage AI firms. Still, the mood across the sector remains broadly optimistic heading into the second half of the year.
The Digital Economy Council expects the UK tech sector to contribute £185 billion to the national economy in 2026, up from £168 billion last year. If current investment trends hold, the country could see its first tech decacorn — a private company valued at over £10 billion — emerge by the end of the year.