Business news 24 June 2025
PM unveils industrial strategy. UK services sector shows resilience. BBB boosts small firms with £6.6bn. UK minimum wage now second highest in Europe. Markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
PM unveils industrial strategy
The UK Government has announced its long-awaited industrial strategy, marking a significant shift in economic policy. Sir Keir Starmer stated that the strategy “marks a turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past.” The 160-page document focuses on eight high-growth sectors, which account for 32% of the economy, and aims to double business investment in advanced manufacturing from £21bn to £39bn by 2035. Key interventions include reducing electricity costs for energy-intensive industries and a £1bn clean energy supply chain fund. The strategy also targets increasing investment in creative industries and digital technologies, with a goal of establishing the UK’s first trillion-dollar tech business by 2035. Five of the eight sector plans have been published, with the remaining three to follow.
UK services sector shows resilience
The UK services sector demonstrated unexpected growth in June, despite tax increases and a decline in employment across the economy. According to S&P Global’s latest flash purchasing managers’ index (PMI), business activity reached a three-month high, with the composite index rising to 50.7 from 50.3 in May. This indicates a slight recovery, as service providers reported an increase in clients for the first time since last November. However, the private sector continues to face challenges, with employment falling for the ninth consecutive month. Chris Williamson, an economist at S&P Global, described the growth data as “disappointingly lacklustre,” projecting a mere 0.1% rise in GDP for the second quarter. He noted that “business confidence also remains in the doldrums” amid concerns over government policies and global trade tensions.
BBB boosts small firms with £6.6bn
The British Business Bank is committing an additional £6.6bn to support small businesses and foster innovation. This includes £4bn allocated to eight key sectors identified as growth drivers, such as advanced manufacturing, clean energy, and digital technologies. Furthermore, £2.6bn will be directed towards small enterprises across various regions. The bank is also investing £350m into new Nations and Regions Investment Funds and plans to enhance its Regional Angels Programme to assist early-stage equity access. Louis Taylor, chief executive of British Business Bank, commented: “Using our market expertise and reach, we have a critical role to play in supporting smaller businesses in the eight growth-driving sectors to grow and stay in the UK.” The initiative follows the UK Government’s Spending Review, which increased the bank’s total financial capacity to £25.6bn.
UK minimum wage now second highest in Europe
British workers now benefit from the second highest minimum wage in Europe, with an average monthly income of £1,984 before tax. The National Living Wage increased by 6.7% to £12.21 an hour this April, making the UK second only to Luxembourg, where workers earn £2,183. The rise is expected to provide over 3m workers with an additional £1,400 annually. However, business leaders warn that these increases, alongside rising national insurance contributions, could hinder hiring. Robert Colvile, director of the Centre for Policy Studies, said: “The changes to employer’s National Insurance and the increases in the minimum wage make it disproportionately more expensive to employ those at the lower end of the wage scale.” Despite the benefits for low-paid workers, the Resolution Foundation predicts that working-age households may be £400 worse off this tax year due to rising costs and tax impacts.
Manufacturers call for focus on tech, skills and infrastructure
According to a report by MHA, technology, skills, and infrastructure should be the Government’s primary focus in its upcoming Industrial Strategy. The survey, which included 1,000 manufacturing business owners and executives, revealed that 35% of respondents identified recent tax increases as their biggest challenge. Despite this, there is optimism, with 55% of respondents expecting modest growth in the next year. The report highlights the need for investment in technology and R&D, with 45% of North West respondents planning to increase their R&D budget.
Markets
Yesterday, the FTSE 100 closed down 0.19% at 8758.04 and the Euro Stoxx 50 closed down 022% at 5221.90. London was nursing only a 20 point loss at the close, with investors awaiting a precise military response from Iran, which did not come during trading hours. UK stocks were helped by gains in oil majors. Airlines however fell on fears over reprisals.
But then Iran launched a limited six missiles at the US base on Qatar, with no casualties, fitting the deescalation model and the world sighed in relief and then news broke of a possible cease fire between Israel and Iran. Overnight in the US the S&P 500 rose 0.96% to 6025.17 and the NASDAQ rose 0.94% to 19630.98.
This morning on currencies, the pound is currently worth $1.361 and €1.173. On Commodities, Oil (Brent) has dropped significantly to $69.5 & Gold is at $3323. On the stock markets, the FTSE 100 is currently up 0.36% at 8790 and the Eurostoxx 50 is up 1.67% at 5309.
NATO chief Mark Rutte said a new defence spending pledge to be announced in the Hague will agree to spend 5% of GDP on defence. Germany is to increase defence spending to 3.5% of GDP by 2029. German defence minister Boris Pistorius signalled the government could eventually increase to 5% of GDP.
UK Prime Minister Keir Starmer will vow to spend 5% of British economic output on security by 2035, embracing an ambitious NATO target sought by President Donald Trump without providing a path on how to get there.
UK cement sector at risk
The UK cement sector is experiencing a significant decline in production, with industry leaders warning that construction firms may increasingly rely on imports. Prime Minister Keir Starmer’s recent industrial strategy aims to reduce energy bills by 25% by 2027, yet UK firms currently face electricity costs four times higher than their US counterparts. Diana Casey, executive director of the Minerals Products Association, highlighted that “the UK is also quite committed to decarbonising,” pointing to the need for domestic production to maintain control over decarbonisation efforts. With imports nearly doubling over the past decade, the competitiveness of UK cement manufacturers has eroded due to foreign firms avoiding carbon taxes. The industrial strategy includes plans for a carbon border adjustment mechanism to level the playing field. However, rising oil prices could further impact energy costs, prompting manufacturers to reassess supply chains.
London Property
The top end of the London’s property market looks to be in a steep decline, with no recovery in sight. Sellers are cutting asking prices, and the few deals being done are taking longer to complete, and some luxury sites are sitting half empty. Just this month, Sotheby’s dropped the price of a Mayfair penthouse to £68 million from £85 million, having originally been put on the market for about £100 million.
Amazon
Keir Starmer welcomed a three-year program by Amazon.com Inc. to invest £40 billion in the British economy over the next three years, including opening four new warehouses.
The online retailer’s plans will create thousands of new jobs nationwide, including 2,000 at a previously announced warehouse in Hull, and another 2,000 in Northampton, the Department for Business and Trade said.
Yorkshire’s employers unite for skills development
Yorkshire’s leading employers and public sector organisations are collaborating to address the skills challenges in the financial and professional services sector, which generates £11.8bn and employs nearly 150,000 people. The Yorkshire and the Humber Financial and Professional Services Skills Commission, established in March 2023, aims to identify and meet the necessary skills. John Heaps, the Commission chair, stated: “The financial and professional services sector is a real jewel in this region’s crown and has great potential for significant growth over the next few years.” The meeting, hosted by Yorkshire Building Society and attended by senior representatives of organisations including Aviva, Deloitte, KPMG, PwC, Santander, West Yorkshire Combined Authority and the City of London Corporation, focused on enhancing collaboration, supporting underrepresented groups, and aligning education with industry needs. The Commission’s findings suggest that addressing skills gaps could add over £1bn in output by 2038, solidifying Yorkshire and the Humber as the UK’s second hub for financial services.
Farage defends Reform non-dom policy
Reform UK leader Nigel Farage has defended his party’s proposed changes to non-dom tax rules, which he claims are “very attractive,” despite warnings from Dan Neidle, founder of Tax Policy Associates, that the policy could cost the UK £34bn. Farage dismissed concerns as “off-the-wall nonsense,” stating: “People are fleeing this country in droves,” pointing to the need to attract wealthy individuals to boost the economy. The proposed “Britannia Card” would allow non-doms to pay a one-off fee of £250,000 while avoiding inheritance tax, with funds redistributed to the poorest workers. Farage believes this initiative could bring “tens of thousands” of people to the UK, contributing significantly to the economy. Elsewhere, Matthew Lynn in the Telegraph complains that the scheme would rely on an inept HMRC to redistribute funds when it can “barely answer the phone” while increasing dependence on the state.
Big Four accountancy firms cut jobs amid AI rise
City AM picks up on news first reported in the Sunday Telegraph that the UK’s Big Four accountancy firms – Deloitte, EY, KPMG, and PwC – are significantly reducing graduate recruitment and cutting hundreds of jobs as artificial intelligence (AI) increasingly automates junior roles. Over the past two years, these firms have slashed early-career hiring by up to 29%, with KPMG making the most substantial cuts, reducing its 2023 graduate intake from 1,399 to 942. Despite these reductions, the firms are also expanding their AI assurance services to meet rising demand, with Deloitte’s audit partner Richard Tedder stating that AI assurance is “critical to adoption.” The shift towards AI comes amid a broader ambition to establish the UK as a global AI hub, with potential economic contributions of £200bn.
Latest Insolvencies
Appointment of Administrator – ANDREW PLASTICS LTD
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Appointment of Liquidators – PRIMROSE PROFESSIONAL UK LTD
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Appointment of Liquidators – LEASEACCELERATOR SERVICES LIMITED
Appointment of Liquidators – MICHON CONSULTING SERVICES LIMITED
Appointment of Liquidators – ALEXANDRA SERVICES (UK) LIMITED
Appointment of Liquidators – KURIKA LIMITED
Appointment of Liquidators – BOOTHY MEDIA LIMITED
Appointment of Liquidators – BIRKDALE ENERGY LIMITED
Appointment of Liquidators – RILLMOUNT INVESTMENTS LIMITED
Why you should become a member of CPA!
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
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