Business news 23 January 2026

UK borrowing falls, retail spending flickers and confidence battles perception

UK businesses end the week facing a familiar mix of mixed economic signals, political uncertainty and rising insolvency risk. Government borrowing has fallen sharply, helped by higher tax receipts, while retail spending showed a short-lived December bounce driven by online sales rather than renewed consumer confidence. At the same time, investment sentiment toward the UK remains fragile, audit reform has stalled, and insolvency notices continue to mount across construction, property, care and professional services. Global markets have rallied on easing trade tensions, but for SMEs selling on credit, cash flow discipline remains critical.

James Salmon, Operations Director.

Economic & Policy Stories

Government borrowing down 38% in December

UK government borrowing fell to £11.6bn in December, a 38% drop compared with the same month last year, according to the Office for National Statistics. The improvement was driven by a sharp rise in tax receipts, which increased by £7.7bn year on year, while public spending rose more modestly to £92.9bn.

Despite the improvement, December still marked the tenth-highest level of borrowing for that month since records began in 1993. Economists say borrowing costs could ease later this year if interest rates fall and the Bank of England winds down quantitative tightening, potentially creating more fiscal headroom.

Why it matters for SMEs selling on credit:
Higher tax receipts rather than lower spending are driving the improvement, meaning pressure on households and businesses may persist, affecting demand and payment behaviour.

Tax receipt increase driven by frozen thresholds

HMRC figures show PAYE income tax and National Insurance receipts reached £347.8bn between April and December 2025, up £36.3bn on the previous year. However, tax experts warn the rise does not reflect a stronger economy.

Shaun Moore of Quilter said frozen tax thresholds and fiscal drag are pushing more workers into higher tax bands, steadily increasing the tax burden without real gains in productivity or living standards. He warned that revenues are rising by stretching household budgets rather than through genuine economic growth.

Why it matters for SMEs selling on credit:
When households are squeezed by higher taxes, discretionary spending tightens, increasing the risk of slower payments and rising arrears for consumer-facing suppliers.

Government bets big on business growth

Business Secretary Peter Kyle has said the Government is “betting big” on growth by taking direct stakes in expanding companies, particularly scale-ups seen as having strong job-creation potential.

Mr Kyle acknowledged that some investments may fail but argued that standing aside during periods of industrial change carries greater risk. The comments underline a shift toward a more interventionist industrial strategy, with public capital increasingly deployed to back selected firms.

Why it matters for SMEs selling on credit:
Fast-growing customers can be cash-hungry, and uneven state-backed growth increases the importance of monitoring credit exposure as supply chains expand.

Ministers urged to act on audit reform

Industry leaders have warned the Government that scrapping the Audit Reform Bill risks further major corporate failures. In a letter to Business Secretary Peter Kyle, figures from the Institute of Directors, the UK Shareholders’ Association and the Chartered Institute of Internal Auditors said abandoning reform is a “significant step backwards”.

They argue that no meaningful legislative change has followed the collapse of Carillion in 2018, pointing to later failures including Thomas Cook, Wilko and Patisserie Valerie as evidence of ongoing weaknesses in audit and governance.

Why it matters for SMEs selling on credit:
Weak oversight of large companies increases the risk of sudden failures, leaving small suppliers exposed to bad debts with little warning.

Industry & Investment

Vanguard pulls £2bn from UK stocks

Investment giant Vanguard is withdrawing nearly £2bn from UK equities, reducing its UK exposure from 25% to 20% as it shifts toward a more global investment strategy. While Vanguard stressed it still has £140bn invested in UK shares, the move highlights ongoing concerns over the relative attractiveness of UK markets.

Investment managers described the decision as a setback for government efforts to boost domestic investment.

Why it matters for SMEs selling on credit:
Lower investor appetite can weigh on confidence, growth and funding availability, increasing caution and slower payment cycles across supply chains.

UK and European partners pledge major North Sea wind expansion

The UK, Germany and the Netherlands have agreed to jointly develop 100 gigawatts of offshore wind capacity in the North Sea by 2050, as part of a broader 300-gigawatt regional target. Energy ministers will also step up cooperation on protecting offshore infrastructure against physical and cyber threats.

The initiative underlines the scale of long-term investment planned for Europe’s energy transition.

Why it matters for SMEs selling on credit:
Large infrastructure programmes create opportunity but involve long timelines and complex contracting, increasing cash-flow risk for smaller suppliers.

Consumer & Retail

UK retail sales rebound in December but quarter ends weaker

UK retail sales rose unexpectedly in December, with volumes up 0.4% after a decline in November. The rebound was driven almost entirely by online sales, which surged 4.2%, boosted by jewellery and food purchases.

Poor weather pushed shoppers away from high streets, and despite December’s improvement, retail sales fell over the final quarter as a whole, highlighting fragile consumer demand.

Why it matters for SMEs selling on credit:
A short-term uplift does not offset weak underlying demand, meaning stop-start ordering and delayed payments remain a risk for suppliers.

Markets & Global Developments

Market snapshot

Global equity markets moved higher over the last 24 hours after US President Donald Trump backed away from plans to impose new tariffs on European countries, easing near-term trade tensions and improving investor sentiment.

In the US, markets held near record levels. The S&P 500 was at 6,913, broadly flat over the last day after strong gains earlier in the week. The Dow Jones Industrial Average stood at 49,384, also little changed, while the Nasdaq Composite outperformed, rising 0.9% on Thursday as technology stocks led the rally. Smaller companies benefited from the improved risk mood, with the Russell 2000 jumping 1.1% to 2,730, extending its year-to-date gains to around 10%.

European markets were mixed. The FTSE 100 edged up 0.2% to 10,175, supported by stronger UK retail sales data, though it lagged some continental peers. Germany’s DAX rose 0.1% to 24,885, France’s CAC 40 was broadly flat at 8,152, while the Euro Stoxx 50 slipped 0.1% to 5,950.

Asian markets extended their recovery. Japan’s Nikkei 225 gained 0.3% to 53,847 after the Bank of Japan left interest rates unchanged. Hong Kong’s Hang Seng Index rose 0.4% to 26,750, marking its third consecutive day of gains.

In currency markets, the pound was little changed against major peers. Sterling traded around 0.740 against the US dollar and 0.869 against the euro. The US dollar weakened more broadly as trade tensions eased and markets looked ahead to next week’s Federal Reserve meeting, adding to uncertainty around US monetary policy.

Commodity markets remained volatile. Brent crude rose to around $64.70 a barrel and WTI crude to $60.00, supported by a weaker dollar and renewed geopolitical tension involving Iran. Gold remained close to record highs at around $4,900 an ounce, having surged earlier in the week as investors sought protection amid policy uncertainty, while silver rose nearly 2% to $98. Natural gas prices stayed elevated following a sharp surge earlier in the week driven by extreme cold weather in the United States.

General & UK-Focused Stories

London crime narrative clashes with the data

A Bloomberg Opinion piece has challenged claims that London is descending into lawlessness, pointing to official data showing the city’s homicide rate has fallen to a record low and remains well below major US cities.

While vigilance is still required, the article argues that exaggerated crime narratives risk damaging London’s reputation and deterring investment, despite strong underlying fundamentals.

Why it matters for SMEs selling on credit:
Negative narratives can undermine confidence and investment decisions, even when data is strong, and confidence plays a major role in payment behaviour.

ByteDance strikes deal to keep TikTok running in the US

ByteDance has agreed a deal allowing TikTok to continue operating in the US through a new joint venture overseeing American operations and data. While safeguards aim to limit foreign influence, critics warn risks remain.

Why it matters for SMEs selling on credit:
Reliance on a single platform for sales or marketing exposes businesses to regulatory and political risk that can disrupt revenue overnight.

Trump sues JPMorgan over alleged “debanking”

Donald Trump has filed a lawsuit against JPMorgan Chase, accusing the bank of cutting ties with him for political reasons and seeking at least $5bn in damages. JPMorgan says account closures are driven by legal and regulatory risk.

Why it matters for SMEs selling on credit:
Greater scrutiny of banking relationships could lead to tighter controls and sudden account changes, making diversification essential.

Real Madrid top Football Money League

Real Madrid topped Deloitte’s Football Money League, becoming the first club to generate more than €1bn in annual revenue. Manchester United fell to eighth after missing out on Champions League income, while nine Premier League clubs featured in the top 20.

Why it matters:
The story highlights how reliance on a small number of revenue streams can quickly reshape fortunes in any organisation.

Insolvency Notices

Appointments of Administrators

• FREP 3 (SALFORD) LIMITED
• JOANIE LIMITED
• METASHEAR LIMITED
• SUTTON CREATIVE LTD

Appointments of Liquidators

• DELOITTE SERVICES LIMITED
• EFFICIENTSYS LTD
• PROJECTEC LTD

Petitions to Wind Up (Companies)

• 00 INVESTMENTS LTD
• 99K LIMITED
• ACTON GROUP NW LIMITED
• AME BUILDING LTD
• ANDERSEN CARE LIMITED
• BEN WHITE SMILES LTD
• BLIZZARD PAY LTD
• BLUE CDM LIMITED
• CARRIAGE COMPANY (OXON) LIMITED
• CHESTNUT HILL INNS LTD
• CHOUDHRY INVESTMENTS LTD
• CMS CARE SERVICE LIMITED
• CUISANCE CONSULTING LIMITED
• D & D ENGINEERING SOLUTIONS LTD
• D F PLANT SERVICES LTD
• DCL CAR SPECIALISTS LTD
• DELI CONSTRUCTION SERVICES LTD
• DEXTEROS LTD
• DF STANMORE LTD
• ECVIA LTD
• F8 SERVICES LTD
• FANZINE LIMITED
• FITTRACK UK LTD
• FLUX DISPATCH FREIGHT LIMITED
• FRESH STARTUPS LIMITED
• FUSION ELECTRICAL AND PLUMBING LTD
• GALI WIGS SERVICE LIMITED
• GCS HOMES LIMITED
• GENWISE LIMITED
• GOLDSTAR TRADE LTD
• GUAP INTERNATIONAL LTD
• HARROGATE ROOFING SERVICES LTD
• HAZEV LIMITED
• HEAD RESTART LIMITED
• HENRY’S ESTATE AGENTS LIMITED
• HIGH TUNSTALL CONSTRUCTION LTD
• HOBANS CONTRACTING CARS LIMITED
• HOGG & FANCY LTD
• ICARUS PRODUCTIONS LIMITED
• IXCHEL LONDON LIMITED
• J AND W GROUNDWORKS LIMITED
• KANDY KA BOOM LTD
• KAYA STONE WORKTOPS LIMITED
• KENT CENTRAL AMBULANCE SERVICE LTD
• KG MAGIC REPAIRS LTD
• LANDMARK ROAD LINING LTD
• LEVEL FLOORING NORTH EAST LIMITED
• LONDON & COUNTIES METALS LTD
• LPL UK HOLDINGS LTD
• LYNCHPIN MEDIA LTD
• MAC EXCAVATIONS & GROUNDWORKS LTD
• MALIK & SONS (YATTON) LTD
• MARKYATE DEVELOPMENT LIMITED
• MASTER ACCOUNTING SOLUTIONS LTD
• MECHANICAL & ELECTRICAL HANDLING SERVICES LIMITED
• MILLINGTON CONSTRUCTION PROJECTS LTD
• MINERVA ARCHAEOLOGY LIMITED
• ML FOUNDATION CIC
• N.R. DECORATING LIMITED
• NKEM ENTERPRISE LTD
• NIMROD PROPERTY INVESTMENTS LIMITED
• PERRYMAN PROPERTIES LTD
• PGG LIMITED
• POWER WISE SYSTEMS (UK) LIMITED
• PPX SOLUTIONS LTD
• RAVEN CONTRACTS LTD
• RCD ELECTRICAL (YORKSHIRE) LIMITED
• RECAP PARTNERS LLP
• REX CONSTRUCTION LIMITED
• ROBERT TAUSSIG CO. LIMITED
• ROSE’S CAFE LIMITED
• ROUTE DELIVERY SOLUTIONS (RDS) LTD
• SCIENTIA CONSULTING LTD
• SENOL & SENOL LTD
• SH GLOUCESTER QUAYS LIMITED
• SHAYE’S LTD
• SPARTAK MANAGEMENT LIMITED
• SQCDF LTD
• ST FUTURE (EUROPE) LTD
• ST. SAVIOURS INVESTMENT & MANAGEMENT LIMITED
• STREAMLINED FITNESS 3 LIMITED
• STREAMLINED FITNESS 4 LIMITED
• SUREFAST BOLTING SERVICES LTD
• TA FELINE UK MANCO LIMITED
• THE ORCHARD PUB LTD
• TIRMOK LTD
• TLB 24/7 HEALTHCARE LTD
• TRUCKPOL & BUS LTD
• UNIVIT LTD
• VANGUARD GLOBAL REALTY LIMITED
• VISTAR SECURITY LTD
• WINDOWMAKER LTD
• WING ELECTRICAL LIMITED

What CPA can do for you

With insolvency risk still elevated and payment behaviour under pressure, CPA supports businesses that sell on credit with practical tools to protect cash flow. From CreditCare reports and ongoing monitoring to ethical recovery of overdue accounts, we help Members stay in control when conditions are uncertain.

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.