Business news 22 January 2026

UK inflation surprise, insolvencies mount and policy uncertainty dominates

UK businesses are facing another testing mix of rising costs, fragile confidence and mounting insolvency risk. Inflation has jumped higher than expected, interest-rate relief looks delayed, and insolvency data continues to underline pressure across construction, retail, hospitality and professional services. While markets have rallied on a temporary easing of US trade tensions, the underlying message for SMEs is clear: volatility remains high, and cash flow discipline is more important than ever.

James Salmon, Operations Director.

SME-Focused & Economic Stories

UK inflation rises more than expected to 3.4%

UK inflation rose to 3.4% in December, up from 3.2% in November and above the 3.3% forecast. The increase was driven largely by higher tobacco prices following excise duty rises, alongside rising food costs and airfares. Economists now believe a February interest rate cut by the Bank of England is unlikely, although some still expect inflation to ease back towards 2% later in the year as temporary factors unwind.

Why it matters: Persistently higher inflation keeps pressure on costs while delaying interest-rate relief, increasing the risk of stretched cash flow and slower customer payments.

Personal insolvencies hit a 15-year high

Personal insolvencies in England and Wales reached 126,240 in 2025, the highest level in 15 years and a 7% rise on 2024. Debt Relief Orders surged to a record 46,939 following changes to eligibility criteria and the removal of application fees, while Individual Voluntary Arrangements also rose sharply. Bankruptcies fell slightly, masking the underlying level of financial distress.

Why it matters: Rising personal insolvencies often feed directly into weaker consumer spending and increased payment risk for SMEs, particularly in retail and construction.

UK public borrowing lower than expected, but still rising

Public sector net borrowing came in at £11.58bn in December, below market expectations but higher than November’s revised figure. Although borrowing was 38% lower than a year earlier, the figures underline continued pressure on public finances and limited room for large-scale tax cuts or business support.

Why it matters: Tight government finances reduce the likelihood of SME relief and can contribute to slower payments from public-sector-linked customers.

Hospitality, Retail & Consumer Pressure

Pubs get tax relief, wider hospitality left out

The Chancellor confirmed that only pubs will benefit from the government’s business rates U-turn, excluding restaurants, hotels and other hospitality firms. Industry leaders warned that the challenges facing pubs are shared across the sector and that selective relief risks accelerating closures elsewhere.

Why it matters: Suppliers face uneven risk across hospitality, with non-pub businesses more exposed to cash-flow strain and delayed payments.

JD Wetherspoon warns on profits as costs surge

JD Wetherspoon reported that energy, wages, repairs and business rates added £45m to costs in the first half of its financial year, exceeding expectations. The warning triggered a sharp fall in the company’s share price and highlighted the scale of inflationary pressure still hitting the sector.

Why it matters: If a large, well-capitalised operator is under pressure, smaller hospitality customers are likely facing even tighter payment conditions.

Spirit of Harrogate enters administration

Spirit of Harrogate, producer of Slingsby Gin, has entered administration citing rising costs and difficult trading conditions. Founded in 2014, the business had built strong brand recognition but employed just five staff.

Why it matters: Brand strength alone is no protection when costs rise faster than demand, reinforcing the need to monitor exposure to discretionary consumer brands.

London’s luxury property market slumps

High-end property sales in London have fallen to a five-year low, with prices in prime central areas such as Kensington & Chelsea and Westminster down more than 15%. Tax changes, including higher stamp duty and the end of the non-dom regime, have hit demand despite continued house price growth elsewhere in the UK.

Why it matters: Weakness at the top end of property markets feeds through to construction, interiors and professional services, increasing the risk of delayed or cancelled payments.

Industry-Specific Stories

Football’s financial crisis deepens

A BDO report shows 90% of finance directors across English football’s top four divisions expect pre-tax losses in 2025. Despite record Premier League revenues, wage inflation and borrowing are driving sustained losses, with many clubs expecting wages to exceed 70% of turnover.

Why it matters: High-profile customers can still be high-risk payers, and suppliers to football clubs may find themselves low on the payment priority list.

Tax, Government & Regulation

Global minimum tax survives political pressure

The OECD’s Pillar 2 global minimum tax remains intact at 15%, despite doubts about its future. Updated rules include a side-by-side system effectively exempting US corporations, but international consensus has held.

Why it matters: Increased tax complexity for multinationals often feeds down the supply chain through tighter payment terms and procurement pressure.

HMRC softens penalties as appeals soar

HMRC is replacing automatic fines with a points-based system for missed tax deadlines, while taxpayers are winning over 62% of penalty appeals. The changes aim to target persistent offenders rather than one-off errors.

Why it matters: Administrative distraction and softer enforcement can weaken overall payment discipline, indirectly affecting SME cash flow.

UK accelerates crypto regulation

New legislation and FCA consultations set out a clear regulatory path for cryptoassets ahead of 2027, positioning the UK as a regulated digital-finance hub rather than a laissez-faire market.

Why it matters: Emerging sectors create opportunities but also unfamiliar credit and counterparty risks for suppliers.

£1.5bn boost for arts and culture

The government announced £1.5bn of funding for museums and arts venues, aimed at protecting at-risk institutions and widening access across communities.

Why it matters: Public funding can support long-term stability, but payments to suppliers are often slow to filter through.

Global Trade & Politics

Markets calm after Trump drops EU tariff threat

Donald Trump withdrew plans to impose new tariffs on European countries following talks over Greenland, triggering a relief rally across global markets. While tensions have eased for now, negotiations continue around minerals and defence cooperation.

Why it matters: Sudden policy shifts create volatility that feeds directly into confidence, pricing decisions and payment behaviour.

Market Snapshot – Global Markets

Global markets staged a broad and forceful rebound after the US president backed away from tariff threats, reversing much of the previous session’s sell-off.

Equities: US markets led the rally, with the S&P 500 rising 1.2% to 6,875.6, the Nasdaq 100 up 1.4% and the Russell 2000 jumping 2% to a record close. European stocks followed suit, with the Stoxx 600 up 1.1%, Germany’s DAX gaining 1.31% and France’s CAC 40 rising 1.33%. In the UK, the FTSE 100 climbed 0.76% to 10,215.5. Asian markets tracked Wall Street higher, with Japan’s Nikkei 225 up 1.73%.

Currencies: Sterling strengthened modestly against the US dollar and euro as risk appetite improved, while the yen gained as investors continued to hedge geopolitical risk. Emerging-market currencies broadly advanced, signalling a short-term return of risk appetite.

Commodities: Gold pulled back slightly to around $4,830 per ounce after hitting record highs earlier in the week, but remains elevated, reflecting ongoing caution. Oil prices were broadly steady, with Brent around $64.80 per barrel. Natural gas was the standout mover, surging to its highest level since 2022 amid freezing weather and supply concerns, highlighting continued energy-cost volatility.

Market tone: While equity markets are firmly risk-on, elevated gold prices and extreme moves in gas markets suggest underlying uncertainty has not gone away.

Insolvency Notices

Appointments of Administrators

• Booth Steel Stockholders Limited
• Booth Transport Limited
• C.F. Booth (Doncaster) Limited
• C.F. Booth (Engineering) Limited
• Caldwell Construction Limited
• Metagravity Group Limited
• Northfield Aluminium Limited
• Robert MacGillivray Panel Products Limited
• Stone Paving Supplies Limited

Appointments of Liquidators

• Bang-It Limited
• Caterfire Limited
• Global Talent Associates Limited
• Lanktree Consulting Limited
• Murdo Allan Consulting Limited
• Njoy Innovations Ltd
• Pindoria Consulting Limited
• Poyraz Energy Services Limited
• Ramayantra Technologies Limited
• Ridge Treasury Consulting Ltd
• Roma Management Ltd
• Sue Wells Associates Limited
• Synergee Consultancy Limited
• Themes Incorporated Limited
• ToponeCRM Limited
• Tromero Ltd
• Venta Compliance Limited

Winding-Up Petitions & Orders

• Archi+Build Ltd
• Associated Sub-Contractors in Limited Partnership (Martin Major)
• Bed & Mattress Factory Outlet Limited
• Halcyon Marketing and Administration Limited
• I P S Law LLP
• Just Call 4 Care Services Limited
• M Squared Building Services Ltd
• PSG Construction Services Ltd
• Supplies Partner Ltd
• Pathak Properties Limited (winding-up order)

What CPA can do for you

With inflation still elevated, insolvencies rising and policy uncertainty driving volatility, proactive credit management is essential. CPA helps members identify risk early, protect cash flow and recover overdue accounts while preserving customer relationships — especially in challenging trading conditions like these.

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.