Business news 11 February 2026

There are tentative signs that the UK economy may have returned to growth at the end of last year. However, any optimism is being tempered by rising tax concerns, labour market weakness, high street closures and mounting political uncertainty. For SMEs trading on credit, today’s environment remains one of fragile demand and heightened risk.

James Salmon, Operations Director.

Economic & Political Landscape

UK economy shows modest signs of recovery

City economists surveyed by Bloomberg expect GDP to have risen by 0.1% in December, led primarily by services activity. The fourth quarter had been weak, as businesses paused investment decisions amid uncertainty surrounding the Autumn Budget. Some analysts believe the worst of that uncertainty is fading, although others caution that December’s uptick may simply reflect a short-term rebound rather than sustained momentum.

Why it matters: A shallow recovery may steady payment behaviour temporarily — but if growth proves fragile, customer caution and delayed invoices could quickly resurface.

Productivity concerns point to future tax pressure

A report from the Centre for Policy Studies warns that persistent public-sector productivity weakness is worsening the fiscal outlook. Failure to deliver even 1% annual productivity improvement could leave a £20bn funding gap by 2028/29, particularly if NHS output does not improve. The implication is that structural fiscal pressures are building beneath the surface of today’s modest growth.

Why it matters: If productivity does not improve, future tax rises or tighter spending become more likely — both of which squeeze SME margins and customer spending power.

Political uncertainty adds risk premium

Betting markets suggest increasing doubt over whether Keir Starmer will remain Prime Minister through the year. A change in leadership could bring looser fiscal policy but also greater short-term policy uncertainty and higher gilt yields. Markets typically react to leadership instability by pricing in borrowing risk.

Why it matters: Rising government borrowing costs can filter through to business finance, tightening credit conditions and increasing pressure on working capital.

Employment & Consumer Backdrop

Tesco warns of a “quiet epidemic” of joblessness

Tesco’s CEO has warned that 9 million people are economically inactive, with unemployment at a four-year high of 5.1%. Nearly one million young people are currently not in education, employment or training. The concern is that labour market weakness is becoming structural rather than cyclical.

Why it matters: A softer labour market reduces consumer demand while creating uncertainty for SMEs balancing wage costs and staffing decisions.

US retail sales stall, highlighting global demand risks

US retail sales were flat in December, with declines in clothing, furniture and car purchases. Analysts suggest consumers may be turning cautious amid rising costs and tariff uncertainty. Severe winter weather may also have dampened activity.

Why it matters: Weaker US demand can ripple into global trade and confidence, affecting UK exporters and investor sentiment.

Tax & Government Pressure on SMEs

High streets under strain as closures accelerate

A Business and Trade Committee report indicates that 38 stores are closing daily. Business rates, retail crime, employment costs and energy bills are disproportionately impacting high street businesses. Opposition figures have accused the government of compounding pressures through taxation and regulation.

Why it matters: Rising fixed costs increase insolvency risk and slow supplier payments across already stretched retail supply chains.

Scottish SMEs cutting staff amid tax concerns

A Rathbones survey shows a quarter of Scottish SMEs have reduced headcount due to rising taxation and regulatory burdens. More than half view government policy as a significant threat, and most feel policymakers do not understand their needs.

Why it matters: Workforce reductions often signal cashflow strain — and reduced capacity can affect payment discipline across networks of small suppliers.

Business rates row deepens for pubs

The Chancellor has been criticised for failing to clarify the impact of business rates reforms. While presented as a long-term cut, many pubs face rising bills due to higher rateable values. The Treasury points to a £4.3bn support package, but operators argue real costs are increasing.

Why it matters: In low-margin sectors like hospitality, even small cost increases can quickly lead to arrears with landlords and suppliers.

Pension rise offers partial consumer support

The state pension will rise 4.8% in April, adding £575 annually for new pensioners. The increase reflects wage growth under the triple-lock system and will raise government spending by an estimated £9bn by 2026/27.

Why it matters: Higher pension income may support spending in certain sectors, but it also adds to fiscal pressures elsewhere.

Industry & Investment Signals

Fintech investment falls to five-year low

UK fintech investment fell 20% in 2025 to $11bn, with a large portion concentrated in a single major fundraise. While the UK remains Europe’s leading fintech hub, funding is becoming more selective and cautious.

Why it matters: Tighter funding conditions can slow innovation in SME finance and payments, potentially reducing liquidity options for smaller firms.

AI disruption sparks investor rotation

Investors are selling shares in companies perceived as vulnerable to AI disruption. Earnings updates and new product launches have triggered broad caution, with some managers warning that any company exposed to displacement risk is being sold indiscriminately.

Why it matters: Market volatility can tighten credit conditions and reduce business confidence, especially in tech-dependent sectors.

Big Tech accelerates AI spending

Alphabet has raised $31bn in bonds and plans up to $185bn in capital expenditure this year. Across the largest tech firms, spending on AI infrastructure will exceed $600bn. The scale of investment reflects both opportunity and competitive pressure.

Why it matters: AI may improve long-term productivity, but near-term disruption is unsettling markets and reshaping investment flows.

UK oil decline continues

North Sea reserves are around 90% commercially depleted, with oil and gas contributing just 1% of GDP. Policy focus is shifting toward offshore wind.

Why it matters: Regional economic shifts may affect supply chains and contractor payment patterns in energy-linked sectors.

Market Snapshot – What’s Driving Markets Today

UK & Europe

The FTSE 100 fell 0.31% in Tuesday’s session, closing at 10,353 before recovering slightly this morning to 10,381. BP was the primary drag, plunging 6.1% after suspending its $750m quarterly buyback programme and reporting lower annual profit. Energy weakness outweighed gains elsewhere, while broader European indices traded mixed.

The Stoxx 600 sits at 619, the DAX at 24,876 and the CAC 40 at 8,285. German markets were relatively stable after Monday’s strong rally, though political uncertainty in the UK continues to weigh modestly on sentiment.

United States

US markets closed mixed. The Dow reached another record high at 50,188, while the S&P 500 fell 0.3% to 6,941 and the Nasdaq dropped 0.6% to 23,102.

The driver was weaker-than-expected retail sales, reinforcing expectations that the Federal Reserve may cut interest rates sooner. Markets are now pricing increased odds of multiple cuts in 2026, with attention turning to today’s US jobs report. S&P futures are modestly higher this morning, reflecting cautious optimism.

Asia

Asian equities rallied overnight, with the MSCI Asia Pacific Index reaching a record high. The Hang Seng rose to 27,266, supported by strong performance in Chinese electric vehicle stocks. China’s central bank reaffirmed a “moderately loose” policy stance, reinforcing growth expectations.

Currencies

The US dollar has fallen for four consecutive sessions as rate-cut expectations build. Sterling has strengthened to 1.3693 against the dollar, while EUR/GBP sits at 0.8704. A weaker dollar supports commodities and risk assets but reflects softening US economic momentum.

Commodities

Brent crude trades at $69.68, supported by expectations that China will continue strategic stockpiling. Gold remains elevated above $5,000 per ounce, benefiting from falling US bond yields and rate-cut speculation. Copper has eased slightly as Chinese buying pauses ahead of the Lunar New Year.

What Markets Are Watching

• US jobs data and Fed rate-cut timing
• UK political developments
• Gilt yields and borrowing costs
• Signs of sustained UK growth versus temporary rebound

Key Levels

UK
FTSE 100: 10,381 (slightly weaker after BP suspended buybacks)

Europe
DAX: 24,876
CAC 40: 8,285
Stoxx 600: 619

US
S&P 500: 6,941
Nasdaq: 23,102
Dow Jones: 50,188 (record high)

Asia
Nikkei 225: 57,650
Hang Seng: 27,266

Currencies
GBP/USD: 1.3693 (pound firmer)
EUR/GBP: 0.8704

Commodities
Brent Crude: $69.68
Gold: $5,064
Copper: $13,108

Insolvency & Credit Risk Update

Appointments of Administrators

• CRENOON LIMITED
• MEDI 4 AMBULANCE SERVICES LTD
• SPARK MEDICAL LIMITED
• TROJAN ENERGY LIMITED

Appointments of Liquidators

• AIRCRAFT MEDICAL LTD.
• ALBUS ACCOUNTING LIMITED
• AVENDUS CAPITAL (UK) PRIVATE LIMITED
• BARCSCON LTD
• CARTER BROS. (FACILITIES MANAGEMENT) LIMITED
• CASPIAN TOOLING & PLASTICS LTD
• CODE FU LIMITED
• CORYTON CONSULTING LIMITED
• DARROW LTD
• DR SUSAN MAYOU PRACTICE LTD
• F R BOXALL CONSULTING LTD
• MEDICAL AND ORTHOPAEDIC SERVICES LIMITED
• PENYFRON LTD
• SAMMONS CONSULTANCY SERVICES LIMITED

Petitions to Wind Up (Companies)

• CDR SUPPLY CO LIMITED
• CENTRE FOR CONTEMPORARY ARTS
• DUNHILL DEVELOPMENT AND CONSTRUCTIONS LTD
• FAST AND FORWARD LIMITED
• FLAVA WORLD FOODS LIMITED
• HOUSING GENIE LIMITED
• H&S AUTO REPAIR & RECOVERY LIMITED
• PDQ EXPRESS (SCOTLAND) LTD
• PRESTDON LIMITED
• QA TECHNICAL SERVICES LIMITED
• S & B REMOVALS LTD.
• UNITY INTERNATIONAL HOLDINGS LIMITED
• VV ELECTRICALS LIMITED

How CPA Can Help in a Fragile Recovery

When growth is shallow and cost pressure is rising, protecting cashflow becomes essential.

Delaying action on overdue invoices reduces recovery rates and increases write-off risk. Early, professional intervention preserves relationships while improving liquidity.

CPA supports Members by:

• Escalating overdue accounts early and ethically
• Strengthening credit control systems
• Identifying higher-risk customers
• Improving payment predictability
• Protecting both revenue and relationships

Protect your cashflow before uncertainty turns into bad debt.

Just call Peter Uwins, CPA’s National Sales Manager, on️ 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.