Business news 17 June 2025
US-UK Trade, inflation, infrastructure, manufacturing, OBR forecasts, tax hit, SME Lending, interest rates, pay transparency, cyber security, house prices, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Starmer and Trump sign tariff deal
President Donald Trump has signed documents to reduce tariffs on UK cars being imported to the US, with Prime Minister Sir Keir Starmer describing the move as a “very important day” for both countries. The US will allow up to 100,000 cars into the US at a 10% tariff, instead of the 25% import tax on all car imports imposed earlier this year. The documents note that the US will set up a similar system for steel and aluminium. Business and Trade Secretary Jonathan Reynolds said the announcement was “the result of work happening at pace between both governments to lower the burden on UK businesses, especially the sectors most impacted by the tariffs”.
Inflation forecast to ease slightly
With the Office for National Statistics set to publish its latest inflation reading this week, economists expect price rises to have dipped to 3.3% in May, from 3.4% in April. While JPMorgan has forecast year-on-year inflation of 3.3%, Goldman Sachs believes consumer price index inflation may have dipped to 3.2%. Meanwhile, analysts from Pantheon Macroeconomics expect May’s rate of price growth to match Bank of England forecasts of 3.4%.
Chancellor to deliver infrastructure strategy
Chancellor Rachel Reeves is set to outline a 10-year infrastructure strategy designed to boost growth and upgrade services across the UK, with ministers allocating £725bn to go towards building train lines, power plants and affordable homes. This will include the already announced £39bn for affordable housing and £14.2bn for the Sizewell C nuclear power station. The strategy will see the creation of the National Infrastructure and Service Transformation Authority (NISTA), with the Government body looking to end a “disjointed approach” to delivery. NISTA chief executive Becky Wood, a partner at EY, said the strategy would help provide businesses with “stability.” Ms Reeves said: “For too long, our infrastructure – our schools and hospitals, or our roads and bridges – have been left to crumble, holding back communities and stunting economic growth.”
UK manufacturers shun US market
British manufacturers are increasingly distancing themselves from the United States as an export destination, primarily due to the disruptions caused by President Donald Trump’s trade wars. According to a survey by Make UK and BDO, 60% of manufacturers believe that the tariffs imposed by President Trump will negatively impact their businesses, with only 4% planning to invest in the US. The turmoil comes at a challenging time, as manufacturers are already grappling with rising inflation, particularly in energy costs, which Make UK warns could lead to “de-industrialisation.” The organisation has revised its growth forecasts, predicting a contraction of 0.2% in UK manufacturing by 2025. Seamus Nevin, chief economist at Make UK, said: “Manufacturers are facing a gathering storm of huge uncertainty in one of their major markets.” The US has now dropped to fourth place in the regions where UK manufacturers expect to conduct business, falling behind Asia-Pacific and the Middle East.
OBR forecasts could create tax and spending shortfall
Revised forecasts from the Office for Budget Responsibility (OBR) could create a £20bn shortfall in Rachel Reeves’ tax and spending plans, especially as the Chancellor has insisted that her fiscal rules are “non-negotiable.” Sources say that the OBR is “uncomfortable” that its current forecast for productivity growth is more positive than the consensus from other economic forecasters, with it suggested that the Treasury watchdog may want to “rein it in.” Oxford Economics estimates that moving the productivity forecast in line with the average independent projection would reduce the OBR’s GDP forecast by 1.4%. James Smith an economist at ING, said: “Further downgrades to trend productivity growth projections … mean the Chancellor is likely in the red, before even considering the mounting pressures on the public purse.” He added: “The overall shortfall may amount to at least £20bn, and that means tax rises are highly likely.”
Businesses brace for NI hike hit
Businesses are preparing for significant changes in response to a £25bn rise in payroll taxes announced in the October budget. A survey for S&W shows that 33% of business owners with a turnover above £5m plan to reduce staff numbers, while 46% intend to raise prices to counteract increased employment taxes. The poll shows that more than half of the owners either have or intend to cut jobs, with 59% reducing staff hours and 51% freezing pay. The increase in employers’ National Insurance contributions from 13.8% to 15% and the reduction of the earnings threshold to £5,000 are expected to have a dramatic impact on the corporate sector. Alex Simpson, a partner at S&W, said: “For most businesses, the extent of the employers’ NIC change was a surprise.” He added: “We anticipated an increase in the employers’ rate, but the additional reduction to the earnings threshold was not expected and is expected to have a dramatic impact over time.” The Bank of England anticipates that the NI increase will contribute an additional 0.2 percentage points to the UK’s inflation rate, which rose to 3.5% in April.
Voters expect tax hikes
A YouGov poll has found that 67% of voters believe Chancellor Rachel Reeves’ spending plans are unaffordable, with many expecting tax hikes in the future. The Treasury is reportedly considering options for tax rises, including increases on dividends and bank profits, while the Institute for Fiscal Studies think-tank has indicated that tax rises seem “almost inevitable,” despite Ms Reeves insisting that her spending plans are fully funded.
Banks’ SME lending hits £4.6bn in Q1
Lending to small businesses by high street banks hit the highest level since 2022 in the opening three months of 2025. Lenders issued £4.6bn worth of loans in Q1, with this a 14% year-on-year jump. Research from the British Business Bank shows that while the Big Four of HSBC, NatWest, Barclays and Lloyds issued 90% of loans to small firms in 2019, challenger banks now account for 60% of annual gross bank lending to SMEs. David Raw, managing director of commercial finance at UK Finance, said: “SMEs are a vital part of the UK economy, and it is encouraging that lending to them continues to go up.”
BoE expected to hold interest rates
Economists expect the Bank of England to hold interest rates at 4.25% this week. While the Monetary Policy Committee (MPC) has cut rates at every meeting since August 2024, bringing the rate down from 5.25%, analysts believe they will hold rates due to an increase in inflation, which rose from 2.6% in March to 3.5% in April. Ellie Henderson, an economist at Investec, said monetary policy “seems to be in a good position, allowing the Bank of England to wait and see how economic conditions and the international political backdrop evolve.” Thomas Pugh of RSM said it was a “sure bet” that the Bank will keep rates on hold at 4.25%, but added: “Looking ahead, the deterioration in the labour market, weaker economic growth along with inflation… should give the Bank all the cover it needs to cut rates again in August.”
New rules look to boost pay transparency
The Government is considering new measures to enhance pay transparency among businesses and combat pay discrimination. Proposed changes include requiring employers to disclose salary brackets in job adverts and publish pay structures. Ministers are also contemplating increasing fines for companies that violate equal pay laws, which will now encompass race and disability discrimination. A Government spokesperson said: “What our duty will do is require specified public bodies to consider how their choices might tackle socioeconomic inequality of outcome.” The initiative aligns with the EU’s pay transparency directive, promoting a proactive approach to pay equity. However, business groups have expressed concerns that these regulations may hinder their ability to attract talent. Jane Gratton from the British Chambers of Commerce emphasised the need for flexibility in rewarding employees based on performance, while Tina McKenzie, policy chair at the Federation of Small Businesses, added: “Encouraging greater pay transparency is a good thing in principle but some of the measures being suggested simply don’t fit the reality of small business life.” Dónall Breen, a senior associate at employment law firm Littler, noted: “There will be a proactive duty on employers to consider pay equity in their organisation and employees will have much more information about salary bands and pay structuring.”
Business rates reform to hit retailers
Britain’s largest retailers are bracing for a £600m rise in property taxes next year under government reforms to business rates, according to research by property agency Colliers. The changes, due to take effect in April, will lower rates for smaller shops but shift the burden onto larger stores with rateable values above £500,000. London’s West End is expected to be particularly hard hit, with 335 retail properties likely to face an average annual increase of £182,727 each, as rateable values rise by about 30%. Supermarkets are also facing steep hikes, with the grocery sector estimated to be in line for £350m in additional costs. A Treasury spokesman said: “We are a pro-business government that is creating a fairer business rates system to protect the high street, support investment and level the playing field.”
Business boosted by cyber security investment
UK businesses are generating an estimated £27bn in additional revenue from investing in cyber security, according to new analysis. The research, by cyber security provider ESET, shows that 53% of UK firms have reported a direct increase in turnover linked to cyber investment. Of these, 70% said their strong cyber credentials were a primary driver of that revenue growth. It was also found that 44% said robust cyber security infrastructure had enabled them to take on more risk, such as entering new markets or adopting emerging technologies. Data from ESET shows that 53% of UK firms have already suffered at least one cyber-attack. The firm calculates that cyber-crime has cost UK firms £63bn in the last three years.
Markets
Yesterday, the FTSE 100 closed at 8878 and the Euro Stoxx 50 closed at 5339. Overnight in the US the S&P 500 rose 0.94% to 6033 and the NASDAQ rose 1.52% to 19701.
This morning on currencies, the pound is currently worth $1.355 and €1.173. On Commodities, Oil (Brent) is at $74.2 & Gold is at $3378. On the stock markets, the FTSE 100 is currently down 0.34% at 8845 and the Eurostoxx 50 is down 0.84% at 5295.
President Trump left the G7 meeting in Canada a day early and declined to sign a joint statement calling for de-escalation. Instead Trump said that Iranians should evacuate Tehran. He denied suggestions it was to work on a ceasefire between Israel and Iran, instead saying his reason was “much bigger than that.”
European equities dropped this morning after President Donald Trump played down the prospects of a ceasefire in the Israel-Iran conflict, also pushing the oil price higher.
PM Sir Kier Starmer said he would revive stalled trade negotiations with Canada at the G7 meeting.
The US dollar’s preeminence is reportedly under threat as US importers are increasingly being asked by their foreign counter-parties to negotiate trades in currencies other than the US dollar, such as Euros, Chinese renminbi, Mexican pesos, and Canadian dollars. The US dollar has declined 8% against its competitors so far in 2025.
Europe is pushing to add further sanctions to Russia and bring down the price of Russian oil exports from $60 to $45 but the US is resisting.
UK market hindered by ‘lack of self-esteem’
Steven Fine, chief executive of broker Peel Hunt, believes that London markets are being held back by a “domestic lack of self-esteem,” suggesting that the UK believes it is in “a lot worse shape than the rest of the world does.” Peel Hunt has voiced concern over the “increasing rate” at which companies are exiting the London market, warning of the “significant challenge” it presented for the UK economy. However, Mr Fine said the UK has “weathered the storm better than most people would think.” Highlighting a number of recent challenges, he added that the economy has “actually been a very strong buffer” against a series of shocks and called for a push to turn “the buffer into a springboard” that will enable firms to move “from the backfoot slightly further forward.”
Reforms needed to boost capital markets
Alastair King, Lord Mayor of the City of London, says that “bold reform, stronger investment and renewed confidence in Britain” is required to deliver capital markets “that back ambition,” arguing that this will help “build a high-growth, high-opportunity economy.” Writing in City AM, Mr King backs the Employers’ Pension Pledge, an initiative that encourages UK employers to prioritise value for money, not just cost, when choosing pension providers. He says this “dovetails neatly” with ongoing work at the Financial Conduct Authority and The Pensions Regulator, and “is about aligning pension outcomes with national priorities.” Mr King also says there is a need to “address the structural barriers holding back our public markets.” He argues that cutting the 0.5% stamp duty on UK share purchases “would boost liquidity and send a clear signal to investors.” He has called for a “rethink” on how ISAs are treated.
House prices slip in June
Analysis by Rightmove shows that UK house prices fell by 0.3% to £378,240 in June. This comes amid an increase in the number of homes coming to the market that has seen competition for buyers hit a decade high. The data shows that buyer demand is up 3% year-on-on-year, while the number of homes coming to the market is up 11% on a year ago. Colleen Babcock of Rightmove said: “Agents have been telling us that sellers need to set a competitive price to have a better chance of finding a buyer in the current market, and it looks like many are listening and responding to that message.” Tomer Aboody, director of specialist lender MT Finance, said that sellers have realised that “if they are serious about selling, they need to be open to offers or price correctly in the first instance.”
Pubs face closure crisis as taxes rise
Pub closures have surged, with 67 declaring insolvency in April, according to Price Bailey. The increase in insolvencies follows tax changes that raised employer National Insurance Contributions from 13.8% to 15% and reduced the payment threshold from £9,100 to £5,000. Additionally, the National Living Wage rose by 6.7% for workers aged 21 and over. Matt Howard, head of the insolvency and recovery team at Price Bailey, said: “The early signs are that the tax and minimum wage hikes… are already tipping some struggling pubs over the edge.” With 21% of the 8,156 operating pubs having negative net assets, many are at risk of going bust.
US deal risks biofuel plant
Ensus, which runs a bioethanol plant in Redcar, says the facility will be forced to close “imminently” unless the Government delivers an “urgent” solution to save skilled jobs. The firm says the recent UK-US tariff deal, which removed a 19% tariff on US ethanol imports, has “fundamentally undermined its business position.” This follows a similar warning from Associated British Foods, which operates the UK’s only other bioethanol plant. The firm said the deal would be the “final blow” to its Saltend plant.
WhatsAd
Meta said it would begin to show paid advertising on its WhatsApp messaging platform for the first time. The adverts will be included on the app’s “Updates” section rather than the part for user chats.
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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!