Business news 18 December 2025

UK businesses head into the final days before Christmas with interest rate cuts firmly back on the agenda, inflation cooling faster than expected, and mounting evidence that cash-flow pressure is spreading across multiple sectors. Markets are volatile, employment costs are rising, and insolvency activity remains elevated — reinforcing the need for strong credit control as we move into 2026.

James Salmon, Operations Director.

Economic & Monetary Policy

Bank of England set to cut rates

The Bank of England is widely expected to announce a quarter-point interest rate cut today, taking the base rate down to 3.75 — its lowest level in almost three years. Policymakers appear increasingly concerned about weak economic growth and a softening jobs market rather than inflation.

Why it matters to SMEs: Lower borrowing costs will help in theory, but rate cuts often signal economic strain — a period when late payments and bad debts typically rise.

UK inflation falls to 3.2%

UK inflation dropped more than expected in November, strengthening expectations of imminent rate cuts. The slowdown was driven by weaker food, drink and clothing prices.

Why it matters to SMEs: Slower inflation may ease some cost pressures, but it also points to fragile demand, which can delay customer payments.

Markets

Market Summary – 18 December 2025

UK & Europe
London equities outperformed European peers after the inflation surprise. The FTSE 100 moved close to record levels, helped by bank shares, while mid-cap stocks also advanced. Markets in Paris and Frankfurt were broadly flat ahead of central bank decisions.

US markets
US equities fell for a fourth straight session, led by sharp declines in technology stocks. Concerns are growing that spending on artificial intelligence infrastructure may not justify current valuations.

Currencies
Sterling weakened against both the dollar and the euro following the inflation data, reflecting expectations of UK rate cuts.

Commodities
Oil prices rose toward $60 a barrel after the US announced a blockade on sanctioned Venezuelan oil shipments. Gold and copper also moved higher as investors reassessed risk.

Why it matters to SMEs: Market volatility and a weaker pound complicate forecasting and can tighten trade credit conditions, especially for import-heavy businesses.

Business & Politics

Labour dismisses North Sea job loss claims

Chancellor Rachel Reeves rejected claims that the windfall tax is causing large-scale job losses in the North Sea sector, despite warnings from industry bodies. Energy firms argue government policy is accelerating contraction in the supply chain.

Why it matters to SMEs: Ongoing uncertainty in energy and infrastructure sectors raises insolvency risk for contractors and suppliers trading on credit.

Workers’ rights overhaul becomes law

Labour has passed a wide-ranging Employment Rights Bill, introducing day-one entitlement to paternity leave and unpaid parental leave, removing the waiting period for statutory sick pay, and strengthening trade union powers. A new Fair Work Agency will enforce compliance.

Why it matters to SMEs: Higher employment costs and reduced flexibility may squeeze cash flow, increasing late-payment risk.

Immigration reforms may hit growth

Proposed immigration reforms could reduce economic output by up to £710m, according to official advisers, with tighter visa rules affecting key low-paid sectors.

Why it matters to SMEs: Labour shortages raise costs and increase failure risk in sectors already operating on thin margins.

Property

London house prices fall

London house prices fell 2.4% year on year, with agents blaming Budget uncertainty and higher transaction costs. Prices across the UK still rose modestly overall.

Why it matters to SMEs: Cooling confidence in London often feeds through to weaker discretionary spending and slower payments.

Insolvency Watch

Petitions to Wind Up (Companies)

  • AMAAN FURNITURE LTD
  • DAYFOLD PRESENTATION LIMITED
  • DRAWSTORM UK LIMITED
  • EAST MIDLANDS CITY STAYS LIMITED
  • FARR BREW LTD
  • FIRST PLUMBING & HEATING (GOC) LIMITED
  • HANEDAN UK LTD
  • MOSAIC MICROLIVING UNITED KINGDOM LIMITED
  • ON-POWER SERVICES LTD
  • PARAGON HOUSE MANCHESTER LIMITED
  • S ROBINSON (PLUMBING & HEATING) CO LTD

Appointment of Administrators

  • DUNFORD WOOD NH LIMITED
  • MUIRA LTD
  • READE SIGNS LIMITED
  • SHAPE WORKS LIMITED
  • VECTOR-FOILTEC LIMITED

Appointment of Liquidators

  • ADCO RAIL LIMITED
  • ALPHA ENERGY CONSULTING LIMITED
  • ARCADIS INTERNATIONAL LIMITED
  • BEASLEY HAYNES LIMITED
  • BJT DESIGN LIMITED
  • CARLIKE SOLUTIONS LIMITED
  • COLUMBIA THREADNEEDLE MULTI-MANAGER LLP
  • COREFLEX LIMITED
  • DANS WORK LTD
  • DMG DATA CONSULTING LIMITED
  • ECLIPSE DESIGN AND MANAGEMENT LIMITED
  • ENSIGN PENSIONS LIMITED
  • FURTHERMORE LTD
  • GARDNER-DELL SOFTWARE CONSULTING LIMITED
  • GEAR 4 LIMITED
  • GOLDEN GLORY ESTATES LIMITED
  • GOOD SENSE HOMES LIMITED
  • HALLAMUS LIMITED
  • LITTLE GREY HOUSE LIMITED
  • M B WOOD & CO
  • MKX ENGINEERING LIMITED
  • NOAH 7 LIMITED
  • PANICON LTD
  • PAKEFIELD SERVICES LIMITED
  • PEACH BLUE CAPITAL LTD
  • QUALITY & EQUALITY LIMITED
  • RJD GENERAL PARTNER II LIMITED
  • RUBICON ENTERPRISE LIMITED
  • SMITH-WEST CONSULTING LTD
  • TAPEDRIVE LIMITED
  • VISION CAPITAL LLP
  • WILBURY METALS LIMITED
  • WILMOR CONSTRUCTION LIMITED

CPA Insight

As inflation eases and interest rates head lower, the risk for SMEs is not cost — it is cash flow. Insolvency volumes remain high across construction, professional services, manufacturing and property. Businesses extending credit into the new year should review limits, tighten terms where possible, and act early on overdue accounts.

CPA can give you the tools you need to trade with confidence.

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