Business news 13 October 2025

Chancellor Rachel Reeves faces mounting pressure over tax reforms as productivity surges and household debt hits a 20-year low. The IFS warns against “directionless tinkering,” while the BRC and Co-op caution that new business rate changes could squeeze small retailers.
Meanwhile, markets remain volatile on renewed US-China trade tensions, and insolvency filings climbed again last week.

James Salmon, Operations Director.

UK Economy & Policy

The UK is heading into a pivotal Budget season as analysts warn that fiscal choices could make or break business confidence.
The Institute for Fiscal Studies (IFS) cautioned Chancellor Rachel Reeves against “directionless tinkering,” urging genuine reform rather than ad hoc tax hikes. The IFS estimated that extending frozen tax thresholds could raise over £10bn annually — but warned this would breach Labour’s pledge not to raise taxes on working people.

At the same time, Pantheon Macroeconomics reported the fastest productivity growth since 2018, with output per hour up 2.1%, driven by stronger tax data. This comes as the Office for Budget Responsibility faces scrutiny over whether its forecasts have been too pessimistic.

UK households are also in better shape than they’ve been in over 20 years, with debt-to-income ratios at 117.1%, their lowest since 2002. Economists say this could fuel a modest rebound in consumer spending — though much will depend on confidence levels and the tone of next month’s Budget.

Education Secretary Bridget Phillipson hinted the Government will scrap the two-child benefit cap, while across Europe, non-EU nationals will soon face new digital border checks under the EU Entry/Exit System, potentially disrupting travel and trade.

Tax & Public Finances

Fiscal debate is intensifying as Labour looks for ways to plug a £20–30bn gap in the public finances:

  • Wealthy households are expected to “contribute more,” with new taxes on property and investments under review.
  • Scrapping National Insurance exemptions for young and older workers could raise over £2bn, though businesses warn it would hit hiring.
  • Pension tax relief and inheritance tax are under scrutiny, with the Treasury balancing fairness against growth.
  • IFS analysts said a permanent wealth tax would likely fail, but a one-off levy could be harder to avoid.
  • The Treasury is also exploring tax breaks for innovators — expanding patent incentives and start-up equity schemes to boost productivity.

Meanwhile, Conservative leader Kemi Badenoch urged Reeves to scrap stamp duty entirely, calling it a “drag on mobility.”

Business & Rates

The British Retail Consortium warned that raising business rates on large retailers could lift food prices by up to 5%, offsetting gains for smaller firms. Co-op chief Shirine Khoury-Haq echoed that sentiment, saying the Chancellor must not “protect big business at the cost of smaller shopkeepers.”

Surveys by Deloitte and BDO show business costs are rising at the fastest rate in four years, with CFOs delaying investment and hiring until after the Budget.

Property & Housing

Major homebuilders are taking matters into their own hands:
Barratt Redrow and Persimmon have launched private ‘Help to Buy’-style equity loan schemes to revive home sales after losing patience with government inaction.
Elsewhere, McCarthy Stone’s CEO John Tonkiss warned that the housing market “is not working,” as over-55s remain stuck in unsuitable homes.

Employment

Employment data offered a glimmer of hope:
SME hiring rose 2.6% in September, the fastest in over a year, with demand strongest among younger workers. Recruiter Hays said the job market remains “challenging but stable.”
Meanwhile, the public sector continues to face scrutiny for spending £70m annually on diversity and inclusion roles, and new research shows Gen Z workers are reshaping expectations around mental health, sustainability and work-life balance.

Financial Services

  • Lloyds Banking Group will set aside £800m to cover motor finance compensation, adding to the cost of the FCA’s redress program.
  • Shadow banking risks are rising, with experts warning of a potential asset bubble.
  • L&G is reportedly preparing a bid for Cushon, NatWest’s pension provider.
  • Financial adviser enquiries have surged ahead of the Budget as clients brace for tax changes.
  • London’s financial services vacancies are up 9% on the year, led by demand for senior roles in audit, tax, and AI.

Technology & Innovation

A major MIT study warns UK firms could be wasting billions on AI tools without strategy — only 5% report meaningful returns.
Bank of England Governor Andrew Bailey countered fears of mass job losses, saying AI “is the most likely candidate for the next big innovation cycle.”
Meanwhile, Google’s research found 59% of SMEs have paused innovative projects due to time pressures, despite strong interest in AI tools.
A new Harvard Business Review paper also flagged the rise of “AI workslop” — low-quality output masquerading as productivity.

Markets Overview

Equities:

  • The FTSE 100 ended Friday down 0.67% at 9,427.47, its steepest weekly fall since September, driven by tariff fears after Donald Trump’s latest China comments.
  • European indices fell sharply Friday but rebounded Monday as Trump softened his stance.
  • US futures rose about 1% in early trading Monday.

Commodities:

  • Copper prices slumped 5% Friday on trade worries.
  • China cut domestic fuel prices for gasoline and diesel.
  • EU carbon permits traded at €78.66/ton.
  • Rio Tinto will permanently close its metal powder plant in Quebec amid weak demand.

Currencies:

  • The US dollar weakened Friday but stabilised Monday.
  • The euro climbed above 1.16, while the Swiss franc firmed as investors sought safety.
  • Risk currencies like the Australian dollar rebounded as trade optimism returned.

The dominant theme since Friday has been US-China trade tensions, with Trump announcing plans to impose 100% tariffs on Chinese exports starting November 1st , before softening his tone on social media on Sunday, showing openness to a deal with China .

This volatility particularly impacted commodity markets (especially copper), caused significant swings in European equity markets, and led to notable currency movements as investors sought safe havens before risk appetite returned on signs of potential de-escalation.

️ Insolvency Watch

Appointments of Administrators
Dorset Aluminium Products Limited
Enthalpy Limited
Evtec Superlight Limited
Eyestyle Centre Limited
PFF Packaging (Sedgefield) Limited
TC Biopharm Limited

Appointments of Liquidators
B & G Chauffeurs Excel Limited
Blue Wolf Global Limited
Eastwood Credit Limited
EmpowerMX Limited
I P I G Limited
Integra UK Midco 2 Limited
JCTC Properties Limited
KFRD54 Holdings Limited
Lewis.Bishop Limited
Magellan Aerospace (Greyabbey) Limited
OT Bidco Limited
Pharmaspectra Dollarco Ltd
RSPS1 Ltd
SGML Technologies Limited
SH Recruitment & HR Solutions Ltd
Simple Projects Limited
Simplifire Ltd
SRK Consulting (Russia) Limited
Stanlington No. 2 PLC
Stebiz Holdings Limited
T C Consultancy Services Limited
TP & Munch Ltd
XSP&B Limited

Petitions to Wind Up (Companies)
Aberdeen Motor Group Ltd
Al Badrah Limited
Ameerah Properties 4 U Limited
Baby PB Limited
Celcian Ltd
Check-It Scaffold Services Limited
Chobai Limited
DGM Renovations Limited
Eagle Plant Hire Limited
Global Freight (N.I.) Ltd
H K Electrical Services Limited
Inside Success Union C.I.C.
Intellimorph Limited
Jack David Harris Decorators Limited
Kaul Industries Ltd
KMH Installations Ltd
Lomax Commercial Interiors Limited
New Vapes 1 Limited
Project Wonderward Ltd
Roasted Holdings Ltd
Surge Consulting Ltd
Traveltrust Global Limited
UAV-Network Ltd
Valicity Care Services Ltd
Wings2 Limited

Winding-Up Orders
RB Building & Construction Ltd

CPA Comment

As the Budget looms, businesses trading on credit face a tight balancing act — juggling rising costs, policy uncertainty, and volatile demand.
If your business is managing overdue accounts or anticipating tighter cash flow, CPA Membership offers tools to protect your position: from credit control and debt recovery support to legal guidance and monitoring alerts.

Join CPA today to keep your business protected before fiscal changes take effect.

Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical