Business news 6 August 2025
Chancellor faces £50bn black hole. Service sector growth slows. Builders see their biggest drop since the pandemic. New car sales fall in July. Markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
⚫ Chancellor faces £50bn black hole
The National Institute of Economic and Social Research (NIESR) has warned that Chancellor Rachel Reeves is facing a £50bn black hole in Government finances and may need to raise income tax, VAT, or National Insurance to address the deficit. NIESR estimates that the Chancellor will miss her borrowing targets by £41.2bn and needs a further £9.9bn to restore the Government’s fiscal headroom. Stephen Millard, the think-tank’s deputy director, said: “Can she fill that gap without breaking the manifesto commitment to raising taxes on working people? I think the quick answer to that is no.” He added that the Chancellor has been left with an “impossible trilemma” of trying to meet her fiscal rules while fulfilling spending commitments and adhering to a manifesto pledge not to raise taxes on working people. Economists at Deutsche Bank think Ms Reeves faces a £20bn gap but argue that this could be filled by extending the freeze on income tax thresholds, while Ruth Gregory, chief economist at Capital Economics, expects the Chancellor to miss her targets by up to £25bn.
💁Service sector growth slows
S&P Global’s PMI for July shows that orders in the services sector fell at the fastest rate since late 2022. The PMI for the services sector dropped to 51.8 from June’s 52.8 on an index where a reading above 50 represents growth. The composite PMI for July came in at 51.5, marking a decline on June’s score of 52. New business fell to 47.7 from 51.3, with this the lowest since November 2022, while employment fell to 45.6 from 47.0, its lowest since February. However, the gauge of future activity rose to 65.9 from 64.4, the second-highest level since October. Matt Swannell, chief economic adviser to the EY Item Club, said the “more modest pace” of growth in the services sector showed that growth rate for the economy is “sluggish and is expected to remain that way.”
🏗️ Builders see their biggest drop since the pandemic
Construction firms suffered the biggest drop in output in over five years after a fresh slump in housebuilding, according to a survey. S&P Global’s construction purchasing managers’ index dropped from 48.8 in June to 44.3 last month, the lowest since May 2020 when the sector was reeling from the first covid lockdown. Builders blamed subdued new business, less work from public-sector projects, site delays and weak consumer confidence for the drop in activity last month. Joe Hayes, principal economist at S&P Global Market Intelligence, said “Forward-looking indicators from the survey imply that UK constructors are preparing for challenging times ahead”
🚗New car sales fall in July
Figures from the Society of Motor Manufacturers and Traders (SMMT) show that new car sales fell 5% year-on-year in July, with 140,154 registered compared to 147,517 in July 2024. Sales of new petrol, diesel and conventional hybrid cars fell by 15%, 8% and 11% respectively, while plug-in hybrid registrations were up a third and electric car registrations were up 9%. With the Government’s Electric Car Grant set to cut the price of some new EVs by up to £3,750, SMMT chief executive Mike Hawes suggested that July’s dip in sales growth was due to consumer’s waiting for “certainty” on which EVs are going to have their prices reduced.
📈Markets
📈Yesterday, the FTSE 100 closed up 0.16% at 9142.73 and the Euro Stoxx 50 closed up 0.14% at 5249.59. Overnight in the US the S&P 500 fell 0.49% to 6299.19 and the Composite NASDAQ fell 0.65% to 20916.55.
💱This morning on currencies, the pound is currently worth $1.329 and €1.1475 .
On Commodities, 🛢️Oil (Brent) is at $68.60 & 💰Gold is at $3,366.
📈On the stock markets, the FTSE 100 is currently up 0.2% at 9160 and the Eurostoxx 50 is up 0.24% at 5262.
US President Trump announced he would increase the 25% tariff on India in ‘the next 24 hours’ owing to India’s ongoing purchasing of Russian oil.
Switzerland has sent its top politicians including the country’s President to Washington to address the issue of 39% tariffs on Swiss imports that would hurt the Swiss foods, pharmaceuticals and luxury goods industries.
US Treasury yields rose to 4.2% for ten year and 4.78% for thirty year bonds after two former US Treasury Secretaries outlined the risk to the $29trn market from the unsustainable fiscal path America is now on.
Saudi Aramco the world’s largest oil company said net income fell to $22.85bn over Q2 2025 down 19% due to average crude oil price of $66.70 v $76.30 in Q1 2025 and $85.70 in Q2 2024 despite higher pumped volumes.
⚖️FCA bans Woodford and fines firm
The Financial Conduct Authority (FCA) has issued a £46m fine against former fund manager Neil Woodford and his firm, Woodford Investment Management (WIM). Alongside a £5.88m fine, Mr Woodford has been banned from holding senior manager roles and managing funds for retail investors. Woodford Equity Income Fund, an investment fund managed by Mr Woodford and WIM, was suspended in June 2019, leaving investors unable to access around £3.7bn in assets. WIM, which has been handed a £40m penalty, said it “strongly” disagrees with the FCA’s decision and intends to appeal.
🚰 Ofwat chief resigns
David Black, chief executive of Ofwat, will step down from his position at the end of August, with an interim successor to be announced in due course. Ofwat said Mr Black, who was appointed interim chief executive in 2021 and took over the role permanently a year later, has decided that now is the time to “pursue new opportunities.” His departure comes a month after the publication of a review by Sir Jon Cunliffe which called for the water regulator to be abolished. Noting an intention to establish a “powerful new regulator,” Environment Secretary Steve Reed said: “During the transition, and under new leadership, Ofwat will play a critical role in regulating the water sector.”
📒New tax rules ease filing burden
HMRC has announced an increase in the Self Assessment tax return threshold for trading income from £1,000 to £3,000. For income between £1,000 and £3,000, some tax may apply, but individuals can use a simplified online service for reporting. The trading allowance will remain unchanged. Earnings below £1,000 are exempt from tax and reporting.
🏦Savers face ‘hidden tax burden’
HMRC data suggests that the number of people paying tax on the interest from their savings is set to jump. Analysis from Nottingham Building Society shows that more than 3.35m people are projected to be taxed on savings interest in 2025, up from just over 3m in 2021. The report looks at cases where the interest earned on savings exceeds the tax-free allowance and becomes liable for income tax. The projected increase comes amid a freeze on income tax thresholds. Almost 40m people are projected to be paying income tax in 2025/26, up from 34.5m in 2022/23. Harriet Guevara, chief savings officer at Nottingham Building Society, said this highlights a “growing and often hidden tax burden on ordinary savers.”
🛫Government urged to offer exit tax clarity
Ministers have been urged to clarify whether the Government will introduce an exit tax, with it suggested that Chancellor Rachel Reeves could reform capital gains taxes to prevent UK taxpayers from taking gains abroad to get an exemption. Dan Neidle, founder of Tax Policy Associates, took to social media to warn that exit taxes “are dangerous things, because mere rumours of an exit tax can be damaging.” He suggested that if the Government was going to introduce an exit tax, “it should have done so immediately, outside the Budget cycle,” adding: “If it’s not, it would be a good idea to publicly rule it out.”
🏥VAT warning over private healthcare
The Independent Healthcare Providers Network (IHPN) has warned that imposing VAT on private healthcare could lead to increased NHS waiting lists and push patients towards unsafe foreign treatments. David Hare, IHPN’s chief executive, said that if even a small number of patients are priced out of private care, the NHS would face a surge in demand. A number of Labour MPs have backed a proposal made by Lord Neil Kinnock calling for VAT on private healthcare, arguing that it could generate £2bn annually for the NHS.
⚖️Will disputes hit all-time high
Disputes over family inheritance are increasing, with the number of wills being challenged hitting a record high in Q4 2024. Analysis by law firm Taylor Rose shows that there were 3,061 applications to enter a ‘caveat’ with the Probate Registry in the closing three months of last year. This marked the first time applications surpassed 3,000 in a single quarter. Data also shows that applications to block probates increased by 56% over the last five years. The generational wealth gap is playing a part in the increase in disputes, with older generations holding a disproportionate share of wealth – with this often tied up in property and pensions. Sharon Macaulay, joint head of wills, trusts and probate disputes at Taylor Rose, notes that “poorly drafted wills by will writers who remain unregulated by a professional body have also led to an increase in claims.”
🚨Latest Insolvencies
Appointment of Administrator – MR HOME IMPROVEMENT LTD
Appointment of Liquidators – CETO ENERGY LIMITED
Appointment of Liquidators – YORK CITY APARTMENTS LIMITED
Appointment of Liquidators – DORABELLE HOLDCO LIMITED
Appointment of Liquidators – CHANGING MINDS SERVICES LIMITED
Appointment of Liquidators – MERLION CAPITAL GROUP LIMITED
Appointment of Liquidators – SCAN CONSULTING LIMITED
Appointment of Liquidators – DORABELLE MEZZCO LIMITED
Appointment of Liquidators – DORABELLE PROPERTIES LIMITED
Appointment of Liquidators – CROWD CHARGE LIMITED
Appointment of Liquidators – RA STUDENT LIMITED
Appointment of Liquidators – B & M DENTAL CARE LIMITED
Appointment of Liquidators – TURRET CONSULTING LTD
Winding up Order (Companies) – PRAETORIAN WEALTH HOLDINGS PLC
Winding up Order (Companies) – BEARES CONSTRUCTION LTD
Petitions to wind up (Companies) – HASK 45 (BATH) LIMITED
Winding up Order (Companies) – CHILDRENS VILLAGE & ENTERTAINMENT LIMITED
Petitions to wind up (Companies) – REVOLTING SPACES GROUP LTD.
Petitions to wind up (Companies) – NOVA WHOLESALE SUPPLIES LTD
Petitions to wind up (Companies) – SERA FOOD LTD
Petitions to wind up (Companies) – SSNC 24HR CARING SOLUTIONS PVT LTD
Petitions to wind up (Companies) – TW1 NO1 LIMITED
Petitions to wind up (Companies) – REGENCY GROUP EUROPE LTD
Petitions to wind up (Companies) – LEO ELECTRICAL SERVICES LTD
Appointment of Liquidators – HIDDEN BEACON LTD
Appointment of Liquidators – J & R NAYLORS HOLDINGS LIMITED
Petitions to wind up (Companies) – CARDANS HEATING LTD
Appointment of Liquidators – CAPE WRATH FILMS LTD
Petitions to wind up (Companies) – J BROCK & SONS LTD
Petitions to wind up (Companies) – B&M RAIL COMPANY LTD
Appointment of Liquidators – DB INTERNATIONAL INVESTMENTS LIMITED
Petitions to wind up (Companies) – LEEDALE LTD
Appointment of Liquidators – MULTI-THREADS LTD
Appointment of Liquidators – J.J.HARRISON(PROPERTIES)LIMITED
Appointment of Administrator – GLAISYERS LLP
➕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!
️ The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.