Business news 21 July 2025
Consumer confidence hits rock bottom. Small businesses demand action on tax hikes. SMEs paralysed by fear and uncertainty. Unemployment, inflation, fraud, employment rights, markets, insolvencies & more business news that we thought would interest our members.
We are back after a few days off last week. Sorry if you missed us.
James Salmon, Operations Director.
Consumer confidence hits rock bottom
Consumer confidence in the UK has reached its lowest point in over a year, primarily due to Labour’s tax increases, which have led to rising prices and job losses. According to Deloitte’s index, household confidence has not been this low since early 2024, coinciding with a four-year high in unemployment at 4.7% and inflation rising to 3.6%. Celine Fenech, a consumer insight expert at Deloitte, said: “Concerns of a slowing labour market have left consumers worried about job security and income growth prospects.” Ian Stewart, Deloitte’s chief economist, noted that the UK is unlikely to see inflation return to the 2% rate seen last summer until well into 2026.
Small businesses demand action on tax hikes
Small businesses are urging the Government to “take its head out of the sand” regarding tax increases and new employment regulations, following a report from the Office for National Statistics indicating a rise in unemployment. The Federation of Small Businesses (FSB) described the job losses as “disturbing” and more evidence “that if you make it more expensive and riskier to give someone a job, the result will be fewer jobs.” FSB chair Tina McKenzie said: “Ramping up jobs taxes, pushing through 28 new bits of employment legislation, and then on top of that mooting a hike in employer pension costs, is not a recipe for job-creation and economic growth.”
SMEs paralysed by fear and uncertainty
Small-to-medium sized companies (SMEs) in the UK are currently “paralysed by fear” due to geopolitical uncertainty and unclear economic policies, according to research by Azets. The firm’s UK CEO, Peter Gallanagh, says many SMEs are “sitting on significant piles of cash” but are hesitant to invest. The spring survey revealed that concerns over economic instability, trade tariffs, and a volatile tax landscape are top worries for SMEs. Gallanagh said: “SMEs are asking for clarity from the Government around tax policy and long-term economic plans. Without it, confidence to invest simply won’t return. Right now, SMEs are treating cash as insurance, not fuel for growth.” Meanwhile, a poll by the Federation of Small Businesses (FSB) found that for the first time in 15 years, more small business owners expect their firms to shrink or close than to grow.
Jobless rate hits 4.7%, wage growth slows
Data from the Office for National Statistics last week revealed that the UK’s unemployment rate has risen to 4.7% in the three months leading to May, surpassing expectations. The increase, up from 4.6% in April, coincides with a slowdown in wage growth, which fell from 5.3% to 5%. The report highlights that vacancies in the UK have also decreased, marking the 36th consecutive month of decline. The decline in job vacancies, now at 727,000, reflects ongoing economic uncertainty, exacerbated by rising national insurance contributions and global trade tensions. With inflation unexpectedly rising to 3.6%, driven by food and fuel prices, the Bank of England faces mounting pressure to consider interest rate cuts at its upcoming meeting on 7 August.
UK inflation hits 18-month high
Inflation in the UK surged to an 18-month high of 3.6% in June, exceeding expectations of 3.4% to 3.5%. This rise is attributed to several factors, including the Chancellor’s increase in employers’ national insurance contributions and the National Minimum Wage, which retailers have passed on to consumers. Food inflation has reached 4.5%, with significant price hikes in essentials like beef and butter. Rachel Reeves acknowledged the struggles of working people and highlighted measures taken to alleviate the cost of living. Adam Deasy, economist at PwC, said: “While price growth remains far above target, the UK economy contracting for a second straight month in May means the Bank is likely to look through the
Over 11,000 firms removed from Companies House register
Over the past year, more than 11,000 UK firms have been removed from the Companies House register due to a concerted effort to combat fraud, money laundering, and other economic crimes. The operation, led by the National Economic Crime Centre and supported by various agencies, targeted companies failing to meet legal requirements. The crackdown aligns with upcoming reforms under the Economic Crime and Corporate Transparency Act, which aims to enhance ID verification and reduce corporate abuse. Despite these efforts, compliance remains low, with only 2.86% of individuals having verified their identity.
Fall in insolvencies offers a glimmer of hope
UK company insolvencies decreased by 8% in June, totalling 2,043, which is 16% lower than the same month in 2024, according to the Insolvency Service. The decline was particularly evident in creditors’ voluntary liquidations, the most common insolvency type. David Hudson, restructuring advisory partner at FRP, described the data as a “glimmer of relief,” noting that hospitality and retail sectors are benefiting from favourable weather. However, he cautioned that “June’s unexpected jump in inflation will only serve to continue eroding profit margins and consumer demand.” Kroll’s head of restructuring, Benjamin Wiles, highlighted the resilience shown by businesses but raised concerns about whether this is sustainable, stating: “The second half of the year will be critical in determining whether this resilience can be sustained.”
Supermarket bosses warn against further tax raids
The British Chambers of Commerce has warned that businesses are being “paralysed” by taxes, with one in three cutting jobs due to increased National Insurance Contributions. Now, CEOs from major supermarkets, including Tesco’s Ken Murphy and Sainsbury’s Simon Roberts, have argued that proposed changes to business rates by Chancellor Rachel Reeves could exacerbate the decline of high streets. Murphy said: “Increasing the burden on large shops would hinder rather than help our town centres,” while Roberts cautioned that these changes would not stimulate growth or investment. Alex Baldock, CEO of Currys, also criticised the proposals, warning they could lead to more store closures and gaps in the high street. They are joined by Helen Dickinson, chief executive of the British Retail Consortium (BRC), who says that the proposed rise in business rates for large stores would “add to inflation at the worst possible moment.” A Treasury spokesman claimed the Government aims to create a fairer business rates system to support investment and protect the high street.
Lords back amendment on ‘day-one’ employment rights
The House of Lords has approved a Conservative-led amendment to the Employment Rights Bill, proposing to change the qualifying period for unfair dismissal from day one to six months. Lord Sharpe argued that while the Government’s intention to protect workers is “commendable,” the current approach is “confused and counterproductive.” He warned that increasing risks for employers could deter hiring, particularly in vulnerable job sectors. The amendment passed with a vote of 304 to 160, receiving support from Conservative, Liberal Democrat, and crossbench members. Dan Chapman, employment partner at Leathes Prior Solicitors, described the vote as “very important,” noting that it reflects a common-sense approach supported by many in the employment law community. The amendments will now be sent back to the House of Commons for further consideration.
Markets
This morning on currencies, the pound is currently worth $1.344 and €1.155.
On Commodities, Oil (Brent) is at $69.30 &
Gold is at $3365.
On the stock markets, the FTSE 100 is currently up 0.13% at 9004 and the Eurostoxx 50 is down 0.3% at 5343.
FTSE 100 gains indicate shift in sentiment
The FTSE 100 is outperforming its European counterparts for the first time in years. With a nearly 10% gain this year, it has reached record highs, surpassing the STOXX 600’s 7.5% increase. Justin Onuekwusi, chief investment officer at St. James’s Place, noted: “We are seeing signs of big asset allocators coming back to the UK,” highlighting a shift in investor sentiment. The index’s strong performance is attributed to a favourable UK/US trade deal, lighter regulations, and appealing valuations. However, challenges remain, including a sluggish economy and high inflation. Despite these issues, the FTSE’s 12-month forward price-to-earnings ratio has reached its highest in five years, indicating a potential recovery in the UK market.
Mid-market businesses surge in growth
Recent research by NatWest indicates that middle-market businesses in the UK are experiencing their fastest growth since Labour’s election last July. The study highlights that these firms, employing between 100 and 2,500 staff, have benefitted from increased sales and new product launches, despite facing challenges such as rising costs. However, business confidence remains below long-term averages, with concerns over higher taxes and low growth forecasts persisting.
FRC plans scaled rules for small businesses
The Financial Reporting Council (FRC) has published findings from its study examining how effectively the audit market serves small and medium-sized enterprises (SMEs). The watchdog has also launched a consultation on new guidance to help auditors deliver more proportionate audits of these businesses. Scalability in auditing standards, issues around technological adoption and understanding proportionality are key features identified in the FRC’s emerging findings. Miranda Craig, Director of Strategy and Change at the FRC, said: “We’ve listened carefully to stakeholders across the audit market and are supporting the system to take immediate action to address their concerns. Our Practice Note consultation launched today will help auditors apply standards more proportionately, while our work with supervisory bodies will ensure more consistent regulation.”
Chancellor accused of repeating boom-and-bust playbook
Bob Lyddon, a banking expert and founder of Lyddon Consulting Services, has accused Chancellor Rachel Reeves of “reinstituting the exact same practices as seeded the ‘Boom’ and the ‘Bust’ last time around.” He warns that her policies, which include relaxing regulations on capital requirements and mortgage lending, could lead the UK into another economic crisis similar to the 2008 financial crash. Lyddon criticises Reeves’ claims of having “fixed the public finances and stabilised the economy,” pointing to reports from the Office for Budget Responsibility and the Office for National Statistics that indicate sluggish growth and high taxes. He cautions that her approach risks a return to “casino banking,” which previously left taxpayers liable for billions. Lyddon concludes, “The same result beckons: taxpayers on the hook again when Boom turns to Bust.”
Crypto market hits $4tn milestone
The global cryptocurrency market has surpassed $4tn for the first time, driven by significant US legislation that is expected to attract institutional investment. Bitcoin reached a record high of over $123,000, with other cryptocurrencies like ether and Solana also experiencing substantial gains. Mark Palmer, an analyst at The Benchmark Company, commented: “Institutional funds, which have been on the sidelines waiting for exactly this type of clarity, will flow into the space.” The recently passed Genius Act regulates stablecoins and is anticipated to encourage Wall Street banks and money managers to invest in digital assets.
Billionaires flee UK amid tax raids
The UK has seen a significant exodus of billionaires, with 18 dollar billionaires leaving over the past two years, according to research by New World Wealth. Notable figures include Nassef Sawiris, co-owner of Aston Villa FC, who has relocated his tax residency to Italy, and property developers Ian and Richard Livingstone, who have moved to Monaco. The recent changes in tax policy, particularly the abolition of the non-dom tax regime and the introduction of inheritance tax on worldwide assets, have been cited as key factors driving this trend. David Lesperance, founder of Lesperance and Partners, noted that “50% of my ultra-high net worth clients had already departed the UK since Labour came to power,” indicating a potential further increase in departures if a wealth tax is introduced. The Government faces a growing fiscal risk as reliance on a small number of high-income taxpayers continues.
Chancellor to reject calls for wealth tax
Rachel Reeves is poised to dismiss calls from left-wing Labour MPs for a wealth tax, amid warnings from cabinet ministers that it would fail to generate revenue as wealthy individuals might relocate. Lord Kinnock has proposed a 2% tax on assets exceeding £10m, potentially raising £11bn for the Treasury. However, cabinet ministers argue that “wealth taxes don’t work,” citing examples from other countries that have scrapped similar measures. A senior government source indicated that while Reeves is hesitant to publicly rule out wealth taxes, alternatives like increasing capital gains tax remain under consideration. Dan Neidle, a tax lawyer, described wealth taxes as “fantasy politics,” warning that taxing savings and investments could hinder growth. The Government is also contemplating extending the freeze on income tax thresholds until 2030, which could raise £7bn but may breach Labour’s manifesto pledge not to increase taxes on working people.
Tax investigations yield record £48bn
The total additional tax collected by HMRC through investigations rose by 15% last year, reaching a record £48bn, an increase of £7bn from £41bn in 2023. Abigail McGregor from Pinsent Masons remarked: “This is a dramatic increase. To keep delivering increases, HMRC will have to continue to increase its number of investigations.” The surge highlights the effectiveness of HMRC’s enforcement efforts in tackling tax evasion and ensuring compliance.
FCA and HMRC ‘stepping up enforcement’
Recent data reveals a significant increase in raids conducted by the Financial Conduct Authority (FCA) and HMRC, highlighting a growing focus on tackling financial crime. The FCA executed eight raids in both 2023 and 2024, a stark rise from just one in 2022. Chris Hayward, policy chair of the City of London Corporation, noted: “Of all the economic threats we must confront, none is so widespread as fraud.” Meanwhile, HMRC has escalated its efforts, launching 648 raids in the last financial year alone. The agency’s push aligns with Labour’s ‘Close the Tax Gap’ initiative, aiming to recover an estimated £5.5bn lost to tax evasion in 2022-23. Emma Shafton, a white collar crime specialist at Reed Smith, commented: “These figures confirm that UK agencies are stepping up their enforcement efforts in the fight against financial crime.”
HMRC embraces AI
HMRC is increasingly integrating artificial intelligence (AI) into its operations, according to its annual report. The report states that HMRC has “explored call summarisation to support telephony advisers,” aiming to enhance efficiency by reducing the time spent on customer call wrap-up. Additionally, the department has introduced innovative AI products for recruitment, such as ‘Skill Scribe’ which aids hiring managers in crafting adverts and interview questions. HMRC is also involved in a cross-government AI chatbot pilot to improve access to guidance on GOV.UK.
Government cracks down on unpaid internships
The Government has initiated a call for evidence regarding unpaid internships, aiming to enhance workers’ rights significantly. Business Secretary Jonathan Reynolds said: “Every young person deserves the chance to build their career through quality work experience, but good employers are still being undercut by those exploiting interns by illegally asking them to work for free.” Current laws already restrict unpaid internships not linked to educational courses, but the Government seeks to gather more data on their impact. Nick Harrison, chief executive of the Sutton Trust, noted that 61% of internships are unpaid or underpaid, which disproportionately affects those without financial support.
Jaguar Land Rover
Jaguar Land Rover is to cut 500 UK jobs due to the expected impact of US tariffs on US demand for its vehicles.
Reckitt Benckiser
Reckitt Benckiser said has sold a 70% stake in its essential home brands including Air Wick and Cillit Bang to Advent for US$4.8bn. It expects to return a $2.2bn special dividend to shareholders.
Water
Environment Agency said incidents of serious pollution rose 60% in the last year to record levels. The disclosure comes ahead of a review of the water industry on Monday by Sir John Cunliffe. Speculation has centred on Ofwat. The UK’s water regulator could be abolished as a result of a major report into the sector expected later today.
Frasers Group defends insolvency strategy
Frasers Group, owned by Mike Ashley, is under scrutiny for its strategy of acquiring distressed retailers and placing them into administration shortly after. Critics argue this approach indicates a lack of commitment to reviving these businesses, suggesting asset-stripping motives. However, Chris Wootton, chief financial officer, defended the strategy, saying: “A lot of what we acquire is very, very distressed businesses that are bankrupt.” He believes that Frasers can successfully turn around these companies by integrating them into their ecosystem. The group’s recent acquisition of Matchesfashion, which was swiftly placed into administration, has particularly raised concerns. Nick Beighton, former chief executive of Matches, labelled the move “unnecessary,” asserting that the business could have been saved. Frasers has previously acquired several troubled retailers, including House of Fraser and Jack Wills, often restructuring or liquidating them soon after.
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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!