Business news 1 July 2025
Private sector braced for dip in activity. Economy grows in Q1. SMEs voice concern over Companies House filing rules. Consumer credit grows in May. Tax, mortgages, jobs, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Private sector braced for dip in activity
A survey from the Confederation of British Industry (CBI) shows that private sector businesses expect to see a decline in activity in the next three months. Firms are braced for a fall in the three months to September, having seen output fall by 26% in the three months to June. The report suggests that business volumes in the services sector, which accounts for around 81% of the UK’s GVA in the UK, is set to fall by 24%, while consumer services are predicted to see a 31% fall in activity. CBI deputy chief economist Alpesh Paleja warned of “sizeable headwinds” that are set to hit growth, including a lower salary threshold for employers’ National Insurance contributions.
Economy grows in Q1
Office for National Statistics data shows that the UK economy grew by 0.7% in the first three months of the year. The Q1 growth figure marks the highest GDP rate since the first quarter of 2024, when the economy expanded by 0.9%. It also marks an improvement on the 0.1% growth seen in the final three months of 2024. While the economy grew in Q1, disposable income per head is estimated to have fallen by 1%. This marks a decline from the 1.8% increase recorded in the previous quarter. Looking ahead, Matt Swannell, chief economic adviser to the EY Item Club, said: “After the strong start to 2025, the UK looks set for another year of weak growth, with headwinds continuing to intensify,” while Thomas Pugh, chief economist at RSM UK, said the second quarter “will look substantially worse than the first quarter as there is some payback from activity brought forward to avoid taxes and tariffs.”
SMEs voice concern over Companies House filing rules
SME founders and investors have warned that new Companies House rules forcing them to disclose detailed profit and loss statements could hurt competitiveness, innovation and growth. As of April 2027, small companies will lose the right to file abridged accounts. They will instead file full accounts, including income statements that detail revenues, margins, director salaries and client concentration. Martin McTague, national chair of the Federation of Small Businesses, said the move “opens the door wide to competitors snooping on margins and for large companies in supply chains to scrutinise smaller suppliers’ finances.” Warning that “it could give big players an unfair advantage and damage small firms negotiating power,” he added that the changes will “make the system less friendly for small business owners at a time when the UK desperately needs more enterprise and growth.”
Consumer credit grows in May
Consumer credit growth slowed slightly to 6.5%, with credit card borrowing easing to 9.2%. The Bank of England data also shows that household savings remained strong, with deposits increasing by £4.3bn, including £3.9bn into cash ISAs. Business borrowing also surged, with non-financial firms borrowing a net £8.6bn – the highest since April 2020.
Threshold freeze set to drive up tax burden
The number of higher rate taxpayers in the UK is projected to surpass 7m this year, with a freeze on thresholds meaning an additional 500,000 individuals will be subjected to a 40% tax rate by 2025-26. Laura Suter, head of personal finance at AJ Bell, cautioned that “everyone is caught by frozen tax thresholds,” impacting not only workers but also pensioners. The current tax structure means that once individuals exceed the £50,270 threshold, they face a significantly higher tax rate on additional earnings. A Government spokesperson noted that the freeze on tax thresholds was inherited from the previous administration, but assured that there would be no increase in basic, higher, or additional rates of income tax.
Markets
Yesterday, the FTSE 100 closed down 0.43% at 8760.96 and the Euro Stoxx 50 closed down 0.42% at 5303.24. Overnight in the US the S&P 500 rose 0.52% to 6204.95 and the NASDAQ rose 0.47% to 20369.73 (more record highs) as animal spirits remained strong over potential trade deals.
Donald Trump hit out at Japan, calling it “spoiled” for refusing to buy US rice. Japan is currently pushing the USA to avoid imposing higher tariffs on Japanese goods from July 9th. Trump hinted that Japan’s reluctance to accept US rice, despite a rice shortage, would incur higher tariffs. Meanwhile, a White House official said that the US administration would announce several trade agreements after July 4th.
The European Union is willing to accept a trade arrangement with the US that includes a 10% universal tariff on many of the bloc’s exports, but wants the US to exempt key trades. Sectors in focus include automotives, steel, semiconductors and pharmaceuticals, some of which have already been hit with tariffs and threats.
This morning on currencies, the pound is currently worth $1.378 and €1.165. On Commodities, Oil (Brent) is at $66.8 & Gold is at $3344. On the stock markets, the FTSE 100 is currently down 0.1% at 8753 and the Eurostoxx 50 is down 0.25% at 5289.
Eurozone June Flash CPI Rose 2% Y/y, Matching Forecast.
The UK Competition & Markets Authority has given the green light for Direct Line Insurance’s takeover by Aviva. The motor and home insurer accepted a £3.7 billion cash-and-shares takeover offer from its larger peer back in December. Direct Line shareholders will receive 0.2867 of an Aviva share, 129.7p in cash, and up to 5p in dividends payments for each Direct Line share held.
Mark Zuckerberg said Meta would create a new division focused on “superintelligence” as it continues to move aggressively against OpenAI and Google. In an internal memo he reportedly told employees, “this will be the beginning of a new era for humanity.”
Mortgage approvals hit 63k in May
The number of mortgages approved for home purchases in the UK rose to 63,000 in May, an increase of 2,400 from April and the first month-on-month rise of 2025, according to the Bank of England. Remortgaging approvals also increased by 6,200 to 41,500, the highest jump since February 2024. Despite less generous stamp duty relief from April, changes to lenders’ affordability assessments and stabilised mortgage rates have supported renewed confidence among buyers. Market experts suggest the increase reflects growing activity and sentiment, with Zoopla projecting a 5% rise in home sales this year.
Graduate job vacancies plummet
Research by Adzuna reveals a significant decline in graduate job vacancies, with levels in May 28% lower than last year. The data indicates that entry-level positions, including apprenticeships, have decreased by 31.89% over the past two and a half years. Additionally, jobs platform Indeed has reported that graduate jobs are at their weakest in seven years, with Big Four consultancies Deloitte, PwC, EY and KPMG among the firms replacing such roles with AI technology.
Tax trap warning over gifting
HMRC has issued a warning over the complexities of gifting money to avoid inheritance tax. Andy Wood, a tax expert at Tax Natives, said: “There’s a common misconception that all gifts are automatically exempt from inheritance tax – but the reality is far more nuanced.” To gift without IHT consequences, individuals can utilise HMRC’s “gifting out of surplus income” exemption, allowing unlimited gifts if they are regular and do not affect the donor’s living standards. Larger one-off gifts are classified as Potentially Exempt Transfers and are only fully exempt if the giver survives for seven years.
Tax havens miss disclosure deadline
Britain’s overseas tax havens have not met a deadline to disclose company ownership and who keeps their money there, raising concerns over transparency. Initially agreed upon in November, the territories were to publish ownership lists by June, but have failed to do so.
Cash ISA allowance cut on the cards
Chancellor Rachel Reeves is reportedly planning to cut the tax-free cash ISA allowance in a bid to encourage savers to invest in London-listed firms. The Chancellor is set to lower the £20,000 cap that savers are allowed to put in cash tax-free as ministers look to boost the UK’s capital markets. Those who back such a move say the £300bn of tax-free cash savings should be invested in UK companies, providing them with much-needed capital. However, Michael Summergill, CEO of investment platform AJ Bell, has warned that reducing the amount savers can hold in cash ISAs, would have a negative impact on savers without having “the desired effect of getting people investing.” Sarah Coles, head of personal finance, Hargreaves Lansdown, said a “carrot not stick approach” is required, arguing that it is ” through encouragement and increased confidence that we will all increase the number of retail investors.”
Gas network
National Grid and SSE respond to Ofgem’s approval of an initial £24 billion investment programme for the operation and maintenance of gas networks in Britain. The investment in UK energy will rise to around four times the current spending levels, will allow for 80 transmission projects and all associated works across the country to be completed within five years, says Ofgem, as well as significantly increasing the grid’s capacity. More than £15 billion will be allocated to ensuring the safe operating of the UK’s gas transmission and distribution networks, whilst £8.9 billion is being committed to the UK’s high-voltage electricity network, plus a further £1.3 billion ready to go.
Government supporting refinery amid owner’s administration
The Government is funding the Official Receiver to ensure the safe operation of an oil refinery after its owner, Prax Lindsey Oil Refinery Limited, went into administration. Energy Minister Michael Shanks told the Commons that the Government is demanding “an immediate investigation into the conduct of the directors and the circumstances surrounding this insolvency.” While there are 420 employees at the refinery, union Unite calculates that 1,000 jobs could be affected when taking into account contractors and the supply chain.
Latest Insolvencies
Petitions to wind up (Companies) – CALON CARDIO-TECHNOLOGY LTD
Appointment of Liquidators – VIVANDA LIMITED
Appointment of Liquidators – SET FORTY HOLDINGS LTD
Appointment of Administrator – NCP CROWES HOLDINGS LIMITED
Appointment of Liquidators – AJB CONSULTING SERVICES LIMITED
Appointment of Liquidators – RAON LIMITED
Appointment of Liquidators – SJM EXECUTIVE SECURITY CONSULTANCY LTD
Appointment of Liquidators – CYBERSIGHT LTD
Appointment of Liquidators – WALKER FIC LIMITED
Appointment of Liquidators – CHANNEL SME HOLDINGS LIMITED
Appointment of Liquidators – NIMBUS AIR LIMITED
Appointment of Liquidators – TOTAL FIBRE COMMUNICATIONS LIMITED
Appointment of Liquidators – Q ENERGY (EUROPE) UK HOLDINGS LIMITED
Appointment of Liquidators – NICO HK LTD
Appointment of Liquidators – AEROF HENLEY LIMITED
Appointment of Liquidators – EVBOX UK & IRELAND LIMITED
Appointment of Administrator – PROTOCOL NATIONAL LIMITED
Winding up Order (Companies) – SHOPPINGGUARANTEED LTD
Petitions to wind up (Companies) – MTL INTERIORS GROUP LTD
Petitions to wind up (Companies) – PERALCON FOODS LTD
Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!
If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA’s collection department for purchase on recourse?
CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.
Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.
Just call 020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
Have you been paid late by business customers in the last six years?
Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.
You put up with the PAIN – now claim the GAIN!
Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients
Check our compensation calculator to see how much your business could be owed!
Discover NOW the potential value of late payment compensation hidden in your sales ledger!