Business news 19 December 2025
The Bank of England has delivered a long-anticipated interest rate cut, offering some relief on borrowing costs. However, policymakers are warning that future reductions will be slower and finely balanced. Against this backdrop, insolvency activity remains elevated, consumer confidence is fragile, and sectors exposed to labour costs, tax changes and regulation continue to struggle. For SMEs trading on credit, the message remains clear: conditions are easing slightly, but payment risk is still firmly in play.
James Salmon, Operations Director.
Economy & Markets
Bank of England cuts rates to 3.75%, but signals caution ahead
The Bank of England cut interest rates by 0.25 percentage points to 3.75%, the lowest level in nearly three years. Governor Andrew Bailey warned there is now “more limited space” for further reductions as rates approach a neutral level, with future decisions expected to be finely balanced. The MPC indicated borrowing costs are likely to fall further next year, but at a slower and less predictable pace.
Why it matters to SMEs selling on credit:
Lower rates help cash flow, but a slower pace of cuts means customers may remain under pressure and slower to pay.
Market Snapshot
UK shares rose after the rate cut, with the FTSE 100 closing up 0.65% at 9,837, one of its highest closes on record. US markets also rebounded, with the S&P 500 and Nasdaq rising strongly after softer US inflation data eased rate fears. European markets hit record highs.
Sterling is steady at around $1.34 against the dollar and slightly weaker against the euro at 1.14, reflecting the Bank of England’s cautious tone.
Oil prices remain weak, with Brent crude below $60 a barrel as supply concerns dominate. Gold prices are broadly higher for the week as investors price in lower global interest rates.
What this means for business:
Markets are calmer, but not confident. Cheaper energy helps costs, while steady sterling limits import shocks — yet growth expectations remain muted.
SME & Credit-Relevant Stories
Retailers and hospitality firms brace for tougher trading
FRP Advisory expects demand for restructuring services to rise as retailers and hospitality businesses struggle with higher business rates, wage costs and weak consumer spending. The firm warned the UK has yet to enter a period of genuine economic confidence.
Why it matters to SMEs selling on credit:
Customer-facing sectors are under strain, increasing the risk of late payment or default.
Consumer confidence ticks up, but spending remains cautious
Consumer confidence edged higher in December, though it remains weak by historical standards. Surveys suggest households are still tightening belts, with many preferring to save rather than spend as taxes rise and disposable incomes shrink.
Why it matters to SMEs selling on credit:
Cautious consumers mean slower sales cycles and more stretched customer cash flow.
Disposable incomes under pressure in 2025
Research from BCG and RSM shows households, including higher earners, are increasingly pessimistic about their finances. The outlook for a consumer-led recovery in 2026 is fading.
Why it matters to SMEs selling on credit:
Weaker household finances filter through to slower payments across supply chains.
Charlotte Keenan highlights importance of backing small firms
Goldman Sachs’ Charlotte Keenan reiterated the need for stronger support for small businesses, marking the success of the 10,000 Small Businesses UK programme, which has delivered billions in extra revenue and thousands of jobs.
Why it matters to SMEs selling on credit:
Access to funding and advice can strengthen resilience, but does not remove payment risk.
Tax, Government & Policy
Farmers warn inheritance tax reforms threaten viability
A government-commissioned review found farmers are deeply concerned about inheritance tax changes, rising wages and the loss of subsidies. Many say potential tax bills could exceed annual profits.
Why it matters to SMEs selling on credit:
Rural and agricultural customers may face sudden financial shocks, increasing credit risk.
Couples marrying later in life to protect pensions
More older couples are marrying to reduce exposure to inheritance tax following proposed reforms, highlighting how tax policy is reshaping financial decisions.
Why it matters to SMEs selling on credit:
Tax changes can quickly alter household finances and spending behaviour.
Sir Jim Ratcliffe attacks UK carbon tax
The Ineos founder criticised the UK’s carbon tax despite government support for key industrial sites, warning it deters domestic investment.
Why it matters to SMEs selling on credit:
Higher energy and compliance costs weaken industrial customers’ ability to pay on time.
Industry & Sector News
UK dealmaking stalls as uncertainty bites
UK mergers and acquisitions fell 8% this year as political and economic uncertainty delayed deals, contrasting with stronger activity in Europe.
Why it matters to SMEs selling on credit:
Delayed investment often means delayed payments from customers awaiting funding or exits.
Planning permissions slump to 15-year low
Approvals for new homes fell sharply, raising concerns over future housing supply despite planning reforms.
Why it matters to SMEs selling on credit:
Construction slowdowns ripple through subcontractors and suppliers, increasing late-payment risk.
Patisserie Valerie continues to struggle
The café chain’s parent company reported widening losses and plans to pivot towards franchising and e-commerce after years of contraction.
Why it matters to SMEs selling on credit:
Hospitality remains fragile, with fewer operators able to meet trade credit terms.
Insurance & Regulation
FCA tightens focus on insurance standards
The regulator will review claims handling and sales practices in home and travel insurance following concerns over rejected claims.
Why it matters to SMEs selling on credit:
Insurance delays can worsen cash flow problems for already-stretched customers.
Hospitality firms risk missing Covid insurance deadlines
Thousands of businesses could lose out on Covid-related insurance payouts unless claim deadlines are extended.
Why it matters to SMEs selling on credit:
Missed compensation could push marginal businesses into arrears or insolvency.
International & Technology
EU agrees €90bn loan package for Ukraine
EU leaders approved a major funding package for Ukraine, backed by joint borrowing, keeping geopolitical risks firmly in focus.
Why it matters to SMEs selling on credit:
Geopolitical instability continues to affect energy prices, confidence and payment reliability.
TikTok reaches deal to secure US operations
ByteDance agreed to a US joint venture for TikTok to comply with American legislation, ending years of regulatory uncertainty.
Why it matters to SMEs selling on credit:
Platform dependency carries regulatory risk that can disrupt sales and marketing overnight.
Insolvency Watch
Appointments of Administrators
- BREAKSPEAR ARMS LIMITED
- BRIP 6 (POOLE) LLP
- GROWUP GROUP LIMITED
- NORWEST AMBULANCE LIMITED
- OFF LIMITS LTD
- QUEEN ELIZABETH’S FOUNDATION FOR DISABLED PEOPLE
- SCOTT FENCING LIMITED
- SOUTH MOLTON TRANSPORT LIMITED
- SYMBIOCO LTD
Appointments of Liquidators
- 3M HEALTH CARE LIMITED
- 46 (CONTRACTS) LIMITED
- BRADFORD & BINGLEY LIMITED
- CIBERNET LIMITED
- COVENT GARDEN BROKERS LIMITED
- CRAIGDON LTD
- DAVIDSONS DAIRY LTD
- DENWOOD HOLDINGS LIMITED
- DENWOOD WOODWORKING MACHINERY LIMITED
- DEVINE SAND & GRAVEL LIMITED
- DPL FINANCE PROJECTS LTD
- ELEVEN FILM (ID) LIMITED
- ELSFAL LIMITED
- ELYSIUM CONSULTANTS LIMITED
- EMS HAMPSHIRE LIMITED
- FOODPACK LIMITED
- GDVD LIMITED
- HFL GLOBAL LIMITED
- HOT GOSSIP LIMITED
- JAN ROBINSON EARLY YEARS LIMITED
- JOHN AYRE LIMITED
- K PLANT LIMITED
- KLORIANN MEDICARE LIMITED
- LOGICAL COMPUTING STRATEGY LTD
- LOGISTICS SECURITY LTD
- MALLORY ENERGY LTD
- MALVERN PROPERTIES LIMITED
- MILLAR SEARCH INTERNATIONAL LIMITED
- MOET HENNESSY SERVICES UK LIMITED
- NUDJ LIMITED
- PENSMAN NOMINEES LIMITED
- PREMFINA FUNDING LIMITED
- SCAPE HOLDCO 1 LTD
- SILVERGATE GROUP HOLDINGS LIMITED
- SILVERGATE MEDIA CREATURE CASES LIMITED
- SIMBA & PARTNERS LIMITED
- SOL INTERNATIONAL LIMITED
- THAMES VALLEY PRODUCTS LIMITED
- VERTEX PHARMACEUTICALS (U.K.) LIMITED
- VISIBLE EVENTS LIMITED
- YP DESIGNS LTD
Winding-Up Petitions
- 1STOPWIND LTD
- ATHERTON CORPORATE PARTNERS LLP
- CLARENDON DOCK LIMITED
- D&T SURFACING AND CIVILS LTD
- DELNEX SOLUTIONS LTD
- GLENMORE GENERATION LIMITED
- HILL BILLY JACKS LTD
- ITALIAN PH LIMITED
- JONES & HARLINGTON LTD
- MAX24 LTD
- MSK OFF LICENCE STORE LTD
- NISA BUCKHAVEN LTD
- NUVOVENTION LTD
- ORANGA CREATIVE LTD
- PJ ALARMS (UK) LTD
- ROCK 102 LIMITED
- SOCIAL PARK HOUSING LIMITED
- SPRINGFIELD DEVELOPMENTS (N.I.) LTD
- TANG DYNASTY EDINBURGH LIMITED
- THE HOEHLE BATHROOM COMPANY LTD
- THREE RIVERS CATERING LIMITED
- TYA GRP LTD
Winding-Up Orders
- ALTUM CAPITAL PARTNERS LIMITED
The Cash flow way, with CPA
If interest rates are easing but insolvencies remain high, now is the time to tighten credit control. CPA members use CreditCare reports, ongoing monitoring and recovery support to spot risk early and protect cash flow before accounts slip out of control.
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