Business news 27 June 2025
PM: We have asked a lot of businesses. Government accused of ignoring SMEs. Filing fears, interest rates, labour market, taxes, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
PM: We have asked a lot of businesses
Sir Keir Starmer has thanked businesses for bearing the brunt of the tax raid set out in last year’s Budget, saying the Government has “asked a lot of” British firms. Addressing the British Chambers of Commerce’s (BCC) annual conference, the Prime Minister said: “I fully acknowledge that this year, as we’ve had to fix the foundations of our country… we’ve asked a lot of you,” adding: “I want to acknowledge that it has made a huge difference.” This comes after a £23bn hike to employer National insurance contributions and a higher minimum wage. Meanwhile, BCC director general Shevaun Haviland has urged ministers not to make firms “pick up any more of the tax burden” as they face “huge cost pressures,” saying: “If there is one message I want government to take away, it is this: there must be no further tax increases at the autumn Budget.”
Government accused of ignoring SMEs
According to the latest Founder Barometer from Virgin StartUp, three in five small business owners feel neglected by the Government, with 57% fearing for their survival in the coming year. This marks an increase from 50% last year, highlighting the growing concerns among SMEs amid rising economic pressures. The cost-of-living crisis remains the primary challenge for 33% of SMEs, although this has decreased from 52% the previous year. Access to finance is another significant issue, with over 60% of founders seeking better support in securing capital. Andy Fishburn, managing director at Virgin StartUp, said: “Small business founders are the backbone of the UK economy, yet the research highlights a large proportion are feeling under pressure in the current economic climate.”
Small businesses face filing fears
Small businesses are expressing “deep concern” over new Companies House filing requirements set to take effect in April 2027. The changes will mandate all companies to use commercial software for annual accounts, eliminating traditional web and paper filing methods. Additionally, small and micro companies will be required to submit profit and loss statements for the first time, which could expose their financial performance to competitors. Martin McTague, national chairman of the Federation of Small Businesses, said: “Small business owners are deeply concerned at this regulatory expansion,” highlighting the potential costs and challenges associated with these changes. Companies House aims to enhance data accuracy and reduce errors through this software transition, promising further details on additional changes in the coming months.
Bailey: MPC watching labour market ‘very closely’
Andrew Bailey, governor of the Bank of England, says the Monetary Policy Committee is watching signals of a rapidly softening labour market “very closely,” telling the British Chambers of Commerce conference that sticky wage growth had been a significant factor in the decision to keep rates higher for longer than many analysts expected. Noting that officials watch pay “very carefully,” Mr Bailey said: “Wage growth remains an important factor behind the remaining persistence in services price inflation in particular.” He added that data points to a “significant decline in wage growth in the year ahead,” as well as a softening in employment after a “very tight” labour market in recent years.
Markets
Global markets were broadly higher yesterday as investors continued to monitor developments in the Middle East, and assess a fresh batch of economic data in the United States. The FTSE 100 closed up 0.19% at 8735.60 and the Euro Stoxx 50 closed down 0.15% at 5244.03. Overnight Wall Street advanced towards record high levels in the US with the S&P 500 up 0.8% to 6141.02 and the NASDAQ up 0.97% to 20,167.91 (both record highs).
The White House walked back on Donald Trump’s previous comments and said a decision on a successor for Federal Reserve Chair Jerome Powell is not near. Markets were reacting to the increased likelihood of rate cuts and the perception that the administration in the US was moving closer to trade deals with China and other trading partners, with Trumps 90 day deadline closing in.
US Commerce Secretary Howard Lutnick said that the US and China had finalized an understanding, and added the White House is nearing agreements with 10 major trading partners, ahead of a July 9 deadline when reciprocal tariffs take effec
US GDP contracted at an annual rate of 0.5% in the first quarter, the US Bureau of Economic Analysis announced on Thursday. This reading came in worse than the previous estimate and the market expectation of -0.2%. The US dollar meanwhile fell to a 3-year low as President Donald Trump continued to apply pressure on the US Federal Reserve.
This morning on currencies, the pound is currently worth $1.374 and €1.173. On Commodities, Oil (Brent) is at $68.35 & Gold is at $3288. On the stock markets, the FTSE 100 is currently up 0.43% at 8773 and the Eurostoxx 50 is up 0.98% at 5296.
UK autos
UK car production slumped to its lowest May level since 1949, with output falling nearly 33% year-on-year to just 49,810 units, according to the Society of Motor Manufacturers and Traders (SMMT). Excluding the Covid lockdown period, this marks the weakest performance in 76 years. The sharp decline was driven largely by a halving of exports to the US after the Trump administration imposed 25% tariffs on cars and parts in March, prompting several UK manufacturers to halt shipments. Despite the downturn, the SMMT expressed cautious optimism, noting that these tariffs are expected to be lifted by the end of June, potentially revitalizing transatlantic trade.
IFS expects taxes to remain high
Paul Johnson, the outgoing director of the Institute for Fiscal Studies (IFS), has warned that taxes in Britain are set to remain high for decades. He said: “The tax burden is going up at its highest level ever in this country,” and suggested that the Chancellor may need to increase taxes to meet fiscal rules. Mr Johnson highlighted potential measures such as extending the freeze on income tax thresholds or introducing a defence levy to raise funds. He expressed concerns that future governments will face increasing pressure to spend more on essential services, saying: “I think tax will go up further, and I am willing to predict that it will not come down from the highest level ever.” Recent forecasts from the Office for Budget Responsibility predict that the tax burden could reach 37.7% of GDP by 2027/28, the highest since records began in 1948.
Tax burden rises for millions
According to HMRC, around 39.1m individuals are expected to be liable for income tax in the 2025/26 tax year, a significant increase from the 34.5m recorded in 2022/23. The number of higher rate taxpayers is projected to reach 7.08m, up from 5.1m in the previous year. Sarah Coles, head of personal finance at Hargreaves Lansdown, noted that fiscal drag has “hauled” over 6m more people into paying income tax, and 3.36m more into paying higher or additional rate tax. This increase is attributed to frozen tax thresholds, which have pushed many into higher brackets as their earnings rise. The analysis also shows that 2m more pensioners are set to have been dragged into paying income tax over the past four years. Laura Suter, of stockbroker AJ Bell, said: “It’s not just working-age people who have faced this rising tax tide. Frozen tax bands with chunky increases in the state pension mean more pensioners are becoming taxpayers,” while Jon Greer, head of retirement policy at Quilter, said: “Many of these individuals are not high earners but are simply victims of a frozen threshold in a period of rising prices.” David Brooks, head of policy at the consultancy firm Broadstone, said fiscal drag is “unequivocally pulling hundreds of thousands more into the income tax bracket each year.” Meanwhile, Neela Chauhan, a partner at UHY Hacker Young, has warned over the increase in people being pulled into the highest band of tax, saying: “There are already concerns of a brain drain in the UK.”
Welfare row could mean higher taxes and rates
City broker Andrew Wishart says a row over reducing the welfare budget could prevent the Bank of England from reducing interest rates. Mr Wishart, an economist at corporate bank Berenberg, says the Government’s failure to control public spending will either lead to higher-than-expected tax rises – which would “stymie business confidence” – or a rethink of fiscal rules, which would “roil” the gilt market and lead to higher interest rates. The Institute for Fiscal Studies and City analysts have warned that the Government will have to raise taxes to fund extra spending commitments, with economists at Capital Economics and KPMG suggesting that Chancellor Rachel Reeves will have to find £20bn in extra receipts to restore her £9.9bn fiscal headroom.
Review flags ‘deep seated’ ONS issues
A review has flagged “deep seated” issues within the Office for National Statistics (ONS) that need to be addressed before the UK’s official statistics agency can “rebuild its reputation.” The review, which calls for a £10m overhaul and a split of the national statistician role, says many of the issues stem from “inadequacies” in the way the ONS plans and makes decisions. Sir Robert Devereux, a former top civil servant who led the investigation, said that “most of the well-publicised problems with core economic statistics are the consequence of ONS’s own performance”, especially “choices made at the top of ONS, over several years.” Acting National Statistician Emma Rourke said she welcomed the report and “fully acknowledges” the issues Sir Robert has highlighted.
Dr Squatch
Unilever is reported to be paying $1.5 billion to acquire men’s personal care brand Dr Squatch from private equity group Summit Partners. The transaction, first announced on Monday, is part of Unilever’s strategy to grow its presence in premium and high-growth categories. Citing ‘several people familiar with the details’ for the amount paid by Unilever, the Financial Times noted that Dr Squatch constituted another big bet on male grooming products after the company paid $1 billion to buy Dollar Shave Club back in 2016, only to sell it again in 2023.
China
China’s Industrial Profits declined 9.1% in May from a year earlier, in the latest sign that Beijing’s stimulus efforts are falling short in boosting enterprises’ profitability.
That marked the largest monthly decline since October last year, when the industrial profits dropped 10%. Industrial profits are a key measure of the financial health of factories, mines and utilities in China.
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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!