South East gears up for growth

With businesses in the South East doing everything they can to gear up for growth, Salim Somjee, Corporate Partner at Birketts and based at the firm’s Sevenoaks office, looks at what’s driving the region’s economy that’s seen its Kent team more than quadruple in size in three years.

No one can deny that rises in National Insurance, national minimum wage and business rates have impacted many businesses, especially in the hospitality and leisure sector. However, despite fears the Autumn Budget would bring even further pain, there’s been a spirit of resilience that continues to push business forward and seek out opportunities.

Since then, the latest ONS figures showed a 0.2% growth in the economy in the three months to January 2026, which was welcome news. While it’s not a huge shift, it is still an improvement on recent months, and with the Bank of England holding interest rates at 3.75%, maintaining their lowest rate since 2023, some may argue we might slowly turn a corner.

On the flip side, UK unemployment at 5.2% is nearly at a five-year high, and annual growth in earnings, excluding bonuses, was 3.8% between November and January, and down from 4.1% from the previous figure. The number of payrolled employees in February fell by 49,000 on the year, but job vacancies remained broadly flat across recent periods with early estimates suggesting a decrease of 6,000 (0.8%), compared to September to November 2025.

Despite this, having just returned from a trip to the United States to meet businesses, it was clear there’s an appetite to invest in the UK. Given the global shocks, and strained relations between the US administration and most other economies, the UK continues to be seen as a safe haven.

It’s difficult to say how the war in the Middle East will unfold and affect business going forward, but while the flow of new investment into the UK has been volatile due to global challenges, overall greenfield foreign direct investment into the UK averaged around $85 billion each year from 2022-2025. US companies remain the largest investors into the UK, with technology and AI, financial services, clean energy and biotech sectors proving to be the most popular.

The UK’s robust legal system and a level of business trustworthiness exceeding many other nations, English still being the pre-eminent language of business, and the City of London on its doorstep, means the South East is perfectly placed to benefit.

The region’s attractiveness to investors is being fuelled by ongoing improvements in its infrastructure, including the go-ahead for a £2.2bn second runway at Gatwick Airport and a further £1bn Budget commitment in the new Lower Thames Crossing.

In part, this has given confidence to Virgin Trains to announce highspeed rail plans between London and the continent, stopping at Ashford and Ebbsfleet – literally getting the Kent economy back on track.

Major infrastructure progressing makes us more attractive to overseas investment. There’s a significant amount being achieved by many homegrown businesses, whether in aeronautics and defence, food manufacture, high-tech engineering, logistics or life sciences.

Crucial to successful business investment is navigating the employment law landscape. Looming on the immediate horizon are significant legal changes, notably the Employment Rights Act 2025 is bringing the biggest overhaul of UK employment law in a generation, with a staged roll out across 2026 and 2027. Colleagues in Birketts’ Employment team are across the detail and urging UK and internationally-owned businesses to be fully prepared.

With the South East set to benefit from increased investment in infrastructure, the region will continue to prove attractive to overseas investors and homegrown entrepreneurial talent. It’s up to us as some of the region’s leading businesses to capitalise on the opportunities that present themselves, whether that be through securing further growth in resource or expertise.