Business news 4 July 2025
Tax rises loom after Labour’s U-turns. Trade tariffs strain small firms. High street sales slump continues. Government reconsiders Companies House reforms. UK Services boosted by Consumer spending, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Tax rises loom after Labour’s U-turns
Rachel Reeves has indicated that tax rises may be necessary in the upcoming Autumn Budget, following a £5bn cost from welfare concessions. The Chancellor said: “Of course there is a cost to the welfare changes that parliament voted through this week and that will be reflected in the budget.” Some economists suggest that Reeves might need to implement over £10bn in tax increases to balance the budget, covering lost welfare savings and rising interest rates. But city analysts have warned that the Government could raise taxes by as much as £20bn this year to restore fiscal headroom. Separately, Keir Starmer has declined to comment on how much tax the Government would have to raise later this year to fill costs left by Labour’s various U-turns.
⛔Trade tariffs strain small firms
Small and medium enterprises (SMEs) in the UK are increasingly concerned about the impact of trade tariffs, with a report revealing that 30% anticipate losses between £10,000 and £20,000 this year. Jonathan Andrew, chief executive at Bibby Financial Services, said: “Doing nothing isn’t an option – that’s the reality of tariffs which is dawning now.” The uncertainty surrounding exchange rates, particularly the weakening of the US dollar, is further complicating matters for exporters. Many SMEs are now looking to China as a new trade partner, shifting focus away from the US.
️️️High street sales slump continues
June proved to be a challenging month for Britain’s high streets, with in-store sales growth lagging behind inflation for the sixth consecutive month. According to the latest High Street Sales Tracker from BDO, overall sales saw a modest year-on-year increase of 0.6%, while online sales surged by 4.3%, driven by changing consumer behaviours. Sophie Michael, head of retail and wholesale at BDO, remarked: “Consumer spending continues to be challenged, with little optimism for retailers.” The fashion sector particularly struggled, with online sales rising by 10% compared to a 0.2% decline on the high street.
UK’s financial and services sector key to growth
The UK’s financial and professional services industry is a cornerstone of economic strength, employing nearly 2.5m people and contributing £285bn to the economy, which is 12.6% of the UK’s total gross value added. A report from TheCityUK’s highlights that over the past decade, the sector has added more than 326,000 jobs, with significant growth outside London in cities like Manchester and Birmingham. Average annual earnings in the sector are £69,474, nearly double the UK average. However, the Big Four accountancy firms are reportedly cutting hundreds of jobs due to AI replacing junior roles. The report goes on to call for government action to stimulate local growth and develop talent pipelines.
Currys warns against tax hikes
Alex Baldock, chief executive of Currys, has urged the Government to avoid increasing taxes on retailers, warning that such a move would “further dampen investment and increase prices in an inflationary way.” His comments follow similar concerns raised by Sainsbury’s CEO Simon Roberts regarding the impact of rising national insurance costs on jobs. Baldock noted that while consumer confidence is improving, it remains lower than last year, and the company is cautious about hiring due to increased costs. He also highlighted concerns over cheap electrical goods being dumped online, calling for urgent government action on tax breaks for low-value goods.
⚖️Government reconsiders Companies House reforms
The UK Government is reconsidering proposed reforms aimed at enhancing the accuracy of Companies House filings, following protests from small business owners. Business Secretary Jonathan Reynolds is reviewing changes that would require companies to use third-party software for annual accounts and mandate small firms to file profit and loss statements starting April 2027. These reforms arise from concerns over the misuse of UK companies by criminals and the register’s accuracy. Critics argue that the new requirements could impose significant costs and risks, potentially compromising small businesses’ competitive edge. A government spokesman stated it is “committed to avoiding undue burdens on businesses,” while Companies House has not commented on the matter.
Markets
Yesterday, the FTSE 100 closed back up above 8800 up 0.55% at 8823.20 and the Euro Stoxx 50 closed up 0.46% at 5343.15.
Overnight in the US the S&P 500 rose 0.83% to 6279.35 and the NASDAQ rose 1.02% to 20601.10 at fresh highs after a stronger-than-expected US jobs report pointed to a resilient labor market despite concerns about U.S. President Donald Trump’s tariff policies potentially weighing on the economy. Nvidia also hit record highs making it the most valuable company in history with a market cap over $4 trillion.
US Nonfarm Payrolls increased a seasonally adjusted 147,000 for the month, higher than the estimate for 110,000 and just above the upwardly revised 144,000 in May, the Bureau of Labor Statistics reported Thursday. April’s tally also saw a small upward revision, now at 158,000 following an 11,000 increase. The unemployment rate fell to 4.1%, the lowest since February and against a forecast for a slight increase to 4.3%.
Trump’s tax bill passed (see more below) and he promised new tariff rates will be set out to counties in letters by July 9th, ranging from 10% to 70% to kick in from 1 August.
The European Union said that it was hopeful of reaching a “framework” trade deal with America, but that a comprehensive agreement would be “impossible” before July 9th, when the Trump administration’s threat of 50% tariffs is due to kick in.
This morning on currencies, the pound is currently worth $1.366 and €1.1605 . On Commodities, ️️️Oil (Brent) is at $68.4 & Gold is at $3343. On the stock markets, the FTSE 100 is currently down 0.3% at 8795 and the Eurostoxx 50 is down 1% at 5290.
Chancellor Rachel Reeves addressed her tearful PMQ appearance, saying ‘When I’m having a tough day, it’s on the telly’.
Bond yields tumble as support grows
UK government bond markets have rallied following Keir Starmer’s endorsement of Rachel Reeves as Chancellor. The yield on British government bonds, or gilts, fell by approximately 0.1 percentage points to around 4.5%, reversing a previous rise driven by speculation about Reeves’s future. Despite this, investors remain cautious due to a significant gap in public finances, exacerbated by recent government decisions. Neil Wilson, UK investor strategist at Saxo Bank, remarked: “The market is getting nervous about its ability to make the sums add up.” Reeves has committed to her “iron-clad” fiscal rules, which require day-to-day spending to match receipts within five years, but economists warn that without corrective measures, she may need to break these rules at the upcoming autumn budget.
Trump’s tax bill triumphs in Congress
The US House of Representatives has passed Donald Trump’s significant tax and spending bill, marking a key legislative victory for the president. The bill, which passed with a narrow 218-214 vote, is expected to enhance immigration enforcement and reduce federal safety net programmes. Republican House Speaker Mike Johnson stated: “This day – this day – is a hugely important one in the history of our nation.” The legislation includes a permanent extension of tax cuts from 2017 and new exemptions for tips and overtime pay. However, it is projected to add $3.3tn to the national debt by 2034, with cuts to Medicaid and the Supplemental Nutrition Assistance Program (Snap) potentially affecting millions. Critics, including Democratic House Minority Leader Hakeem Jeffries, condemned the bill as “one big, ugly bill” that undermines support for vulnerable Americans.
Ministers reject Netflix tax proposal
The UK Government has rejected proposals for a Netflix tax aimed at supporting British television, citing the importance of attracting foreign investment. The proposed tax, which would have funded a new cultural initiative, faced backlash from streaming companies, who warned it could jeopardise the UK’s thriving TV industry.
️UK Services boosted by Consumer spending
Recent research indicates a “healthy pickup” in UK business activity, driven by consumer and business spending, despite concerns over rising taxes and energy costs. The Office for National Statistics reported a 0.3% contraction in the economy for April, but S&P Global’s purchasing managers’ index (PMI) for June revealed a rise to 52.8, signalling growth in the services sector. Tim Moore, director at S&P Global, noted that while new work increased, “shrinking export sales were a constraint on service sector growth.” Additionally, employment numbers fell for the ninth consecutive month, with redundancies contributing to the decline. Matt Swannell from EY Item Club highlighted a “healthy pickup” in services activity, suggesting GDP growth may align with survey findings. However, businesses remain cautious, with many expecting lower sales due to US tariffs and geopolitical tensions.
️️Wind farms
Almost a year after lifting a de-facto ban on new onshore wind farms in England, the government has announced a plan to revive investment in the struggling wind industry. The Onshore Wind Industry Taskforce, set up in the days after last year’s election, has identified more than 40 steps to spur new developments, including improvements to planning, community ownership and cooperation between the industry and the Ministry of Defense.
Bank of England softens stance on stablecoins
Sasha Mills, Executive Director of Financial Market Infrastructure at the Bank of England, stated that the central bank is “open minded” about the role of stablecoins in wholesale markets. Speaking at the City Week conference, Mills highlighted that while central bank money should remain the primary settlement asset, stablecoins could foster innovation. This marks a shift from the Bank’s previous cautious stance, as noted in a July 2024 discussion paper that identified “significant financial stability risks” associated with stablecoins. The Bank of England is set to consult on stablecoin requirements later this year.
US stablecoin policy could destabilise global payments system
Europe’s largest asset manager, Amundi, has expressed concerns regarding the rise of dollar-backed stablecoins following the US Senate’s passage of the GENIUS Act. The legislation aims to establish a regulatory framework for US dollar-pegged cryptotokens, which could lead to significant shifts in global money flows. Vincent Mortier, Amundi’s chief investment officer, stated: “It could be genius, or it could be evil.” Mortier said people mat deposit money into a coin as they would a bank and use them as a direct means of payment. “It could potentially destabilise the global payment system,” he said. “I’m not so sure it’s a good idea”.
Latest Insolvencies
Appointment of Administrator – HARVEST ENERGY AVIATION LTD
Appointment of Administrator – STATE OIL LIMITED
Appointment of Administrator – PRAX TREASURY LIMITED
Appointment of Administrator – B&H.PT. LIMITED
Appointment of Administrator – HARVEST ENERGY LIMITED
Appointment of Administrator – PRAX PETROLEUM LIMITED
Appointment of Administrator – WOW HYDRATE LIMITED
Appointment of Administrator – 100LEMONS COMPANY LIMITED
Appointment of Administrator – LONDON PROPERTY SERVICES (REPAIR AND MAINTENANCE) LIMITED
Appointment of Administrator – GLYNN QUINN FOODS LTD
Appointment of Administrator – ELECTIVA HOSPITALS BIRMINGHAM LIMITED
Appointment of Liquidators – BISHOPSWOOD HOMES LIMITED
Appointment of Liquidators – REILLOC CHAIN LIMITED
Appointment of Liquidators – LIMONE VENTURES LIMITED
Petitions to wind up (Companies) – BEST BULGARIAN SHOP LTD
Appointment of Liquidators – XEDAP LIMITED
Appointment of Liquidators – HLS PUBLIC FINANCE CONSULTANCY LTD
Appointment of Liquidators – WOVENHILL LTD
Appointment of Liquidators – DEEP BRANCH BIOTECHNOLOGY LTD
Appointment of Liquidators – MULCH. LIMITED
Appointment of Liquidators – HATCH PICTURES LIMITED
Appointment of Liquidators – SECURE RECORDS & DATA MANAGEMENT LIMITED
Appointment of Liquidators – HACKROOM LIMITED
Appointment of Liquidators – JEM QS LIMITED
Appointment of Liquidators – W3 HORN LIMITED
Appointment of Liquidators – OLDFIELDS (AUTOMOBILES) LIMITED
Appointment of Liquidators – ALFA LAVAL HOLDINGS LIMITED
Appointment of Liquidators – DUDLEY’S AMERICAN MOTOR HOMES LIMITED
Petitions to wind up (Companies) – CM GROWFRESH LIMITED
➕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.
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- ️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.
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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!
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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!
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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!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.