Business news 25 July 2025
Economy stumbles as PMI dips. Lloyds CEO warns against higher taxes. Consumer confidence slips in July. Retail, NIC, insurance, house prices, wealth tax, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
📉Economy stumbles as PMI dips
Surveys indicate that the UK economy is facing significant challenges, with S&P Global’s preliminary UK Composite Purchasing Managers’ Index (PMI) falling to 51.0 in July from 52.0 in June on an index where a reading below 50 points to contraction. This decline suggests a slowdown in growth, with the gauge on hiring reaching its lowest point since February. Chris Williamson, chief business economist at S&P Global Market Intelligence, expressed concern, saying: “Particularly worrying is the sustained impact of the budget measures on employment.” Meanwhile, the Confederation of British Industry says that while the manufacturing sector has stabilised, the outlook remains fragile, with job cuts continuing. While the Bank of England is expected to reduce interest rates for the fifth time in 12 months in August, Matt Swannell, chief economic advisor to the EY Item Club, does not expect a wave of rate cuts to follow, saying: “We’re yet to see the sort of deterioration in the official labour market or activity data that could prompt a pivot to faster rate cuts.”
🏦Lloyds CEO warns against higher taxes
Charlie Nunn, the chief executive of Lloyds Banking Group, has warned Chancellor Rachel Reeves that increasing taxes on banks would damage the UK’s competitiveness and undo the benefits of cutting red tape. He said: “It’s important when looking at the competitiveness of the City of London that we have a competitive tax regime,” going on to note that the City already has “the highest tax regime in the financial services sector of any major economy.” Mr Nunn also welcome Government plans to deregulate the finance industry, calling for an overhaul of ringfencing rules that force banks to separate their retail arms from their investment divisions. He said: “There is a real opportunity to align regulation increasingly with competitiveness and growth.” Mr Nunn also said he expects the Bank of England to cut interest rates twice more in 2025, with this likely bringing the base rate to 3.75%.
📉Consumer confidence slips in July
Confidence among British consumers has declined, with the GfK consumer confidence index dropping to -19 in July, with this below the long-run average of -10. This decline follows concerns over potential tax increases in the upcoming Budget. Neil Bellamy, consumer insights director at GfK, comments: “With speculation growing over possible tax rises… the news is worrying.” The savings index, however, rose to 34, the highest since November 2007, with Mr Bellamy saying this indicates that consumers are “building contingency funds.” Overall, expectations for the UK economy over the coming 12 months remain negative, standing at -29. This is 18 points lower than last July. Sentiment about the country’s general economic situation over the past year has slipped to -44 from -32 a year ago.
🛍️ Retail
The Office of National Statistics released figures showing that retail sales rose 0.9% month on month in June verses estimates of 1.2%. The annual rate was 1.7% against estimates of 1.8%.
💼NIC tax take climbs in Q1
The Government pulled in a record £34.2bn through employers’ National Insurance contributions in the first three months of the year, according to research by UHY Hacker Young, with this up from £29.3bn in Q1 2024. Phil Kinzett-Evans, a partner at UHY Hacker Young, said: “A record National Insurance bill for businesses has added very sharply to the costs of large and small employers alike.”
📈Markets
📈Yesterday, the FTSE 100 closed up 0.85% at 9138.37 helped by jumps in HSBC and Shell, and solid corporate news. Over the channel, the Euro Stoxx 50 closed up 0.2% at 5355.20. Overnight in the US the S&P 500 rose 0.07% to 6363.35 and the NASDAQ rose 0.18% to 21057.96.
Reckitt Benckiser shares jumped nearly 10% after a strong Q2 result and the board upgrading full year revenue growth to 4% Operating profit was up 1.8% to £1.7bn during the first half.
Volkswagen reported a €1.3bn cost on account of US tariffs in respect of the first half causing its net profit to decline 39% to €7.27bn.
ECB has kept interest rates unchanged highlighting an ‘exceptionally uncertain’ global environment.
Federal Reserve chairman Jerome Powell publicly corrected claims of an overspend on new buildings pointing out live on air that the costs referred to by President Trump were attributable to a building finished five years ago, and not any ongoing project.
💷This morning on currencies, the pound is currently worth $1.347 and €1.146 .
💲The US dollar gained after Trump down-played his clash with Jerome Powell over the Fed’s renovation costs, saying it wasn’t reason enough to fire him. He did however, renew his call for lower interest rates.
On Commodities, 🛢️Oil (Brent) is at $69.5 & 💰Gold is at $3354.
📈On the stock markets, the FTSE 100 is currently down 0.4% at 9104 and the Eurostoxx 50 is down 0.6% at 5322.
⛈Insurance sector calls for more weather protection
The UK insurance sector has called for the Government to increase investment in flood protection. This comes as data shows that British insurers paid out a record £226m in weather-related claims in Q1, exceeding a high of £67m recorded in 2022. Association of British Insurers figures show that the industry paid out £585m for weather-related damages to homes and possessions in 2024. Kelly Ostler-Coyle, director of corporate affairs at Flood Re, said the sector is “entering a challenging new era, facing both rising claims costs and a significantly more constrained global reinsurance market.”
🏠House prices set to climb as loan rules ease
Lloyds Banking Group has revised its house price growth forecasts upwards, anticipating a 2.6% increase this year, followed by 3% in 2026 and 2.3% in 2027. This optimism stems from recent changes by the Financial Conduct Authority aimed at easing mortgage affordability rules. Charlie Nunn, Lloyds’ chief executive, expressed confidence that these regulatory adjustments are “completely appropriate” and will not lead to increased defaults, as they are still subject to stress-testing for higher rates. In contrast, Savills and Rightmove have lowered their growth predictions to 1% and 2% respectively, highlighting a divergence in market outlooks.
Elsewhere Rightmove reported a 10% rise in revenues to £211.7m helped by estate agent activity and demand for its ‘Optimiser Edge’ product.
👨 Jobs market sees ‘small burst’ in hiring
Data from the Recruitment and Employment Confederation (REC) shows that there was a “small burst” in demand for jobs in June. The report shows that the number of vacancies hit 757,594 last month, with this driven by an 8.1% increase in job postings in London. Overall, jobs postings were down 2.6% year-on-year, with April’s increase in National Insurance having an impact. REC chief executive Neil Carberry said: “As businesses adjust to higher National Insurance and react to growing demand, even at an anaemic level, they are returning to hiring in a steady but unspectacular way.” Mr Carberry, who has called for a “no surprises Budget” that avoids tax hikes on jobs, said: “The key to the labour market now is the same as it is for the wider economy: confidence.”
💰Chancellor faces wealth tax backlash
Chancellor Rachel Reeves is under pressure to dismiss a proposed wealth tax, which critics argue could harm business confidence and drive investors away. Some Labour MPs are calling for a 2% tax on wealth exceeding £10m, potentially raising £24bn annually. Shadow Chancellor Sir Mel Stride said: “I urge the Chancellor to rule out such a tax immediately,” noting that 10,000 to 15,000 high-net-worth individuals have already left the UK since Labour were elected, creating a “gaping hole” in the tax base. Daniel Herring from the Centre for Policy Studies cautions that additional taxation could stifle investment and growth, while Tom Clougherty from the Institute of Economic Affairs labelled a wealth tax a “disaster for Britain,” warning of potential capital flight.
🏠Wealth tax could hit 142k homeowners
Analysis for the Times reveals that nearly 150,000 homeowners could face increased taxes if a wealth tax on properties valued at £2m or more is introduced. Chancellor Rachel Reeves is under pressure to generate revenue amid economic challenges, with speculation surrounding a wealth tax on affluent taxpayers. Labour MPs, supported by Tax Justice UK, have previously proposed a 2% tax on assets exceeding £10m. However, a mansion tax on homes valued at £2m or more is reportedly being considered, which would require regular property reassessments. Savills’ research indicates that 142,500 properties fall into this category, predominantly in London and the South East.
🐷Record number of farms close amid IHT raid
Office for National Statistics data shows that 6,365 agriculture, forestry and fishing businesses shut down in the past year – the highest number since 2017. Among these, a record number of farms closed. The closures are largely attributed to changes in tax policy, particularly the reduction in inheritance tax relief for family farms. Shadow Environment Secretary Victoria Atkins warns that these policies are “destroying generational businesses” and leading to job instability.
👩Pension wealth warning for women
Analysis by investment platform Interactive Investor shows that women are retiring with significantly less pension wealth than men and are at risk of running out of wealth just seven years into retirement. Women aged 55-59 have £81,000 in their pension on average, compared to £156,000 for men of the same age. Calculations based on withdrawals of £11,000 a year show that women with a pot worth £81,000 could run out of money after seven years, while men with £156,000 would see their pension last for 17 years. Recent analysis published by the Department of Work and Pensions shows that in 2020 to 2022, there was a 48% pension gap on average between men and women aged 55-59. Camilla Esmund, senior manager at Interactive Investor, said: “Despite having lower pension values, women live for longer on average in retirement, and are often left struggling financially in old age once their pension wealth has dwindled.” The newly relaunched Pensions Committee has pledged to focus on addressing the gender pay gap, while a new report from the Work and Pensions Committee has urged ministers to commit a UK wide strategy to tackle pensioner poverty.
💼UK and India sign £6bn trade deal
Prime Minister Sir Keir Starmer and his Indian counterpart, Narendra Modi, have signed a trade deal worth an estimated £6bn. The deal, which took three years to negotiate, will mean UK cars and whisky will be cheaper to export to India, while Indian textiles and jewellery will be cheaper to export to the UK. Sir Keir said the agreement was “the biggest and most economically significant” trade deal Britain had made since Brexit. Under the deal, British firms will not have to pay any payroll tax on Indian workers on temporary secondment. Some critics have voiced concern that this will mean workers from India could be preferred to UK staff due to the recent hike in National Insurance. However, Business Secretary Jonathan Reynolds said it was “completely wrong” to suggest the deal could undercut British workers.
UK -US Steel
The UK is still pressing for “full implementation” of its trade deal with the US, Prime Minister Keir Starmer said as he downplayed the prospect of a breakthrough on steel tariffs during US President Donald Trump’s personal visit to Scotland this weekend.
💷ISA delays reduce growth potential
Analysis by wealth management group Bowmore shows that consumers who delay investing in their ISA allowance until the end of the tax year could reduce the potential for long term growth and miss out on “substantial” long-term gains. The report says investors who delay investing in stocks and shares ISAs have missed out on up £123,000 in compound growth over the past 20 years. While a consumer investing the full allowance in a stocks and shares ISA at the end of the tax year would have accumulated £1.34m over 20 years, those investing at the start of the tax year would have built up £1.47m.
✨AI to drive entertainment and media growth
The global entertainment and media industry is projected to reach $3.5trn by 2029, driven by the increasing use of AI in advertising, according to PwC’s Global Entertainment & Media Outlook 2025-29. The industry is expected to grow at a compound annual growth rate of 3.7% until 2029, with non-digital categories like live events also contributing to this growth. Digital formats are anticipated to account for 80% of overall ad revenue by 2029, with connected TV ad revenue projected to reach $51bn. Additionally, video game revenue is expected to grow to approximately $300bn by 2029.
😷Just £182m of £1.4bn PPE cash clawed back
Only a small portion of the £1.4bn spent on failed personal protective equipment (PPE) contracts during the pandemic has been recovered, with just £182m clawed back so far. The Government is still seeking to recover £468m from PPE contracts, but has conceded that at least £762m will never be reclaimed. The Covid Counter Fraud Commission, led by Tom Hayhoe, is also facing challenges in addressing the estimated £1.9bn in fraudulent Covid loans. Robert Salter, a director at Blick Rothenberg, has kept a tally of pandemic-related loans and says that that if 50% of Bounce Back Loans Scheme debt goes unpaid, it would cost the Government approximately £23bn.
🚨Latest Insolvencies
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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!
️ The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.