Business news 17 February 2026

UK households are growing more cautious, unemployment has climbed to its highest level since the pandemic, and markets are increasingly betting on Bank of England rate cuts. While the FTSE 100 reached a record close on banking strength, sterling fell sharply after weaker labour data. For SMEs supplying goods and services on credit, today’s data points to one clear message: cashflow risk is quietly rising.

James Salmon, Operations Director.

SME & Economic Stories

Consumer confidence hits two-year low

The UK Consumer Sentiment Index fell to 44.8 in February, its weakest reading in two years. Households are increasingly worried about rising debt levels and access to credit, with most age groups accumulating more borrowing. The most significant deterioration has been among younger consumers, despite relative resilience among 18–34 year olds.

Why it matters: Weaker confidence often means slower payments, tighter household budgets and increased default risk for SMEs trading on credit.

Unemployment rises to 5.2% – highest since pandemic

The unemployment rate rose to 5.2% in the final quarter of 2025, above forecasts and the highest level since the pandemic. Youth unemployment climbed to 14%, reflecting a marked slowdown in hiring. The Office for National Statistics described hiring activity as weak, while wage growth eased to 4.2%, with private sector pay growth slowing more sharply than the public sector.

Markets interpreted the figures as clearing the way for rate cuts.

Why it matters: Rising unemployment increases bad debt risk while easing wages may dampen consumer demand for SME goods and services.

Sterling falls as rate cuts priced in

The pound dropped to around $1.3558 after the labour market data, its lowest level in nearly three weeks. Money markets are now pricing in two Bank of England rate cuts this year, with a March reduction increasingly anticipated.

While lower rates may ease borrowing costs, the immediate market signal reflects weakening economic momentum.

Why it matters: Currency volatility and rate uncertainty affect import costs, financing decisions and customer confidence.

Employment Rights Act may deter hiring

A new CIPD survey shows 37% of businesses plan to reduce permanent hiring in response to upcoming employment reforms. The Act, due to take effect in January, reduces the qualifying period for unfair dismissal rights and is expected to raise employment costs.

Over half of employers anticipate increased workplace conflict.

Why it matters: Higher employment costs can constrain SME growth and reduce customer demand if job creation stalls.

Defence spending rise may mean higher taxes

Sir Keir Starmer has signalled an ambition to raise defence spending to 3% of GDP by 2029. Analysts warn that without offsetting cuts, higher taxation may be required. Public finances are already stretched, and further spending commitments increase fiscal pressure.

EU alignment could complicate deregulation

Rachel Reeves has called for closer economic alignment with the EU where it serves the national interest. However, critics argue that re-aligning with certain EU environmental regulations could complicate efforts to accelerate housebuilding and reduce red tape.

Regulatory direction remains a key business confidence factor.

AI threatens white-collar roles

Microsoft’s AI chief has suggested many white-collar roles could be automated within 12–18 months. AI-assisted coding and professional services automation are already advancing rapidly, raising concerns about entry-level employment opportunities.

Engineering firm enters administration

Gilks, a long-established engineering firm in Cheshire, has entered administration with 105 job losses. Despite restructuring attempts, no viable rescue could be secured.

UK develops alternative to Visa and Mastercard

A government-backed initiative known as DeliveryCo will build new UK payments infrastructure by 2030. The Bank of England is supporting the project to enhance competition, resilience and accommodate stablecoins.

Why it matters: Long term payment resilience is positive, but near-term transition uncertainty can affect transaction systems and settlement flows.

Landlord sell-off may be stabilising

The proportion of homes for sale that were previously rental properties has fallen back toward long-term averages. While regulatory and tax pressures previously pushed landlords out of the market, the pace of exits appears to be slowing.

Clean energy pact with California

The UK has signed a clean-energy partnership with California, with Octopus Energy pledging $1bn investment in US renewables. Political tensions remain, but cross-border green investment continues.

Why it matters: Energy transition investment influences long-term cost structures for UK businesses.

Market Snapshot

Markets remain cautious despite record highs in London.

The FTSE 100 closed at 10,473.69, a record close, supported by banking stocks including NatWest. This morning it trades around 10,508. The STOXX 600 sits at 619.07, while Germany’s DAX stands at 24,791.83 and France’s CAC 40 at 8,317.16.

In the US, markets were closed for Presidents Day, but futures point lower. The S&P 500 is at 6,836.17, the Dow at 49,500.93, and the Nasdaq at 22,546.67, with futures suggesting a weaker open amid AI disruption concerns and fragile sentiment.

In Asia, Japan’s Nikkei 225 fell to 56,566.49 on profit-taking and tech concerns.

Currencies

  • GBP/USD: 1.3589
  • EUR/GBP: 0.8714
    Sterling weakened following UK labour data.

Commodities

  • WTI Crude: $63.10
  • Brent: $67.98
  • Gold: $4,924.70 (sharp fall in thin trading)
  • Copper: $12,850.50

Morning Wrap

Markets have turned cautious as trading resumes after the long weekend. Yesterday’s UK and European cash sessions posted modest gains, with the FTSE 100 hitting a record close on banking strength while the STOXX 600 edged 0.1% higher. US markets were closed for Presidents Day, but futures turned negative overnight and extended losses this morning, with Nasdaq futures down 0.5% as AI disruption fears continue to weigh on tech sentiment.

Asian markets traded lower overnight in thin volumes due to Lunar New Year holidays, with Japan’s Nikkei falling 0.4% on profit-taking. Key overnight developments include weaker UK jobs data pushing the pound to three-week lows and raising BOE rate cut expectations, while gold collapsed below $5,000 in holiday-thinned trading. The yen outperformed on haven demand, while oil held gains ahead of US-Iran talks.

Investor sentiment remains fragile as markets await key US economic data later this week, including Fed minutes on Wednesday and PCE inflation data on Friday, with futures pointing to a weaker open when Wall Street returns from the holiday.

Insolvency Notices

Appointments of Administrators

  • 21:12 Communications Limited
  • Brand Interiors Limited
  • Cliff Edge Ltd
  • Grafters Labour Supply (Colchester) Ltd
  • Hanx Limited
  • Henry Nuttall Limited
  • Marasu’s Petits Fours Limited
  • New Sun Holdings Limited
  • Prestat Group Ltd
  • Prestat Limited
  • Rococo Chocolatier Ltd
  • Round Table Post Production Ltd

Appointments of Liquidators

  • AAM Horizons Ltd
  • Ahmoores Anaesthetic Services Limited
  • AJS Sunningdale Limited
  • Ashwell Homes Limited
  • CloudEra Consulting Limited
  • Coppmed Limited
  • Dalegarth Project Services Limited
  • Dr Tabs Limited
  • Drum of Wartle Filling Station Ltd
  • Enlighten Financial Services Limited
  • Evoit Limited
  • F.L. Caswell Limited
  • Flame Risk Safety Solutions Limited
  • G & T Associates (Services) Limited
  • Grangely Technical Services Limited
  • J & D Fire Consultancy Limited
  • John W Joyce Engineering Limited
  • Karidaw UK Ltd
  • Kasinsky Ltd
  • Koysor Ltd
  • Kyle Stewart Holdings Limited
  • Land & Anchor Ltd
  • M A MC 2 Ltd
  • McColl Associates (Consulting Engineers) Limited
  • Mountain Heaven Holdings Ltd
  • Park Farm Medics Limited
  • Pactcontact Limited
  • Pickwell Park Developments Limited
  • Pinpoint Strategy Limited
  • Quizzy Works Limited
  • R and R Groundworks Limited
  • Rice Consultancy Limited
  • Samba & Mela Ltd
  • Stingray Media Limited
  • Tarraco Planning Limited
  • Tilica Limited
  • Tomac Investments Limited
  • UK Home and Residential Limited
  • Xexiqon Limited
  • Yeoman Strategies Limited

Winding-up Petitions

  • Anglo Europe Limited
  • D Carmichael & Sons Ltd
  • GHC Cafe (UK) Co. Limited
  • Harriss Property Limited
  • JKB Groundworks and Construction Ltd
  • L&J Bespoke Builders Edinburgh Ltd
  • Oldlfb Limited
  • Overtone Brewing Ltd
  • Shave & Son Enterprises Ltd
  • The White Swan at Ash Limited
  • Thompson & Cooke Limited

How CPA Can Help in a Softening Economy

When confidence falls and unemployment rises, overdue invoices increase.

SMEs cannot afford to carry growing debtor balances while demand weakens.

CPA helps Members:

  • Act early before debts age
  • Maintain customer relationships while recovering cash
  • Strengthen credit decisions with CreditCare reports
  • Protect margins in low-growth conditions

In uncertain economic conditions, disciplined credit control becomes a competitive advantage.

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