Business news 28 April 2025
UK economy faces sharp slowdown. Confidence in Britain’s economy hits rock bottom. Insolvency rates surge as costs rise. Lending gap stifles UK SMEs, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Please note: on the 19/3/25 CPA moved after 45 years on King Street, to new offices a couple of miles down the road at Profile West, 950 Great West Road, Brentford, TW8 9ES.
UK economy faces sharp slowdown
The UK economy is projected to experience a significant slowdown over the next two years due to the global tariff war initiated by Donald Trump, according to a study by EY Item Club. The report indicates that UK GDP growth is expected to be just 0.8% this year, a reduction from the previously estimated 1%. EY Item Club has also cut its 2026 forecast from 1.6% to 0.9%. Matt Swannell, the chief economic adviser at EY Item Club, said: “Disruption to global trade has only increased the chances that we may see a larger fiscal policy rethink in this year’s spending review and autumn Budget.” A separate survey from BDO found mid-sized UK businesses are reacting to potential supply chain disruption from tariffs by targeting new export markets in Asia, Africa and Australia. Nearly 40% expect to increase exports over the next year, rising to over 50% of businesses in the retail, wholesale and tech sectors.
Confidence in Britain’s economy hits rock bottom
According to a recent Ipsos MORI poll, confidence in the UK economy has reached an all-time low, with 75% of Britons anticipating a decline over the next year. This marks an 8% increase in pessimism since March, with only 7% expecting improvement. The net balance of minus 68 indicates the lowest optimism since Ipsos began tracking in 1978. Gideon Skinner, Ipsos’ senior director of UK Politics, noted: “Pessimism about the economy (was) already up 30pts compared with last June.” The current sentiment mirrors the economic downturns of the 1980 recession, the 2008 financial crisis, and the COVID-related cost-of-living crisis.
Insolvency rates surge as costs rise
The number of businesses registering for insolvency increased by 9% year-on-year, reaching 1,992 in March, according to the Insolvency Service. The rise is attributed to higher labour costs and impending trade levies. Tim Cooper, president of R3, noted that the figures reflect “a business climate that is being shaped and buffeted by national and global political issues.” The data indicates that creditors’ voluntary liquidations rose by 8% to 1,543, while compulsory liquidations increased by 5% to 295. Additionally, administration filings surged by 30% to 137. The construction sector was notably affected, with 4,046 insolvencies reported. Furthermore, the number of individuals in England and Wales seeking debt relief rose to 8,033, marking a 4% increase from the previous year.
Lending gap stifles UK SMEs
Research by Allica Bank reveals a £90bn “lending gap” in bank finance for the UK’s small and medium-sized enterprises (SMEs), hindering investment and economic growth. The report highlights a “credit shortfall” in productive SME lending, which has fallen significantly below historic trends. Allica noted that lending to SMEs is £90bn lower than levels recorded between 1997 and 2004, with a substantial credit gap of up to £65bn remaining unfilled by non-bank finance. Richard Davies, chief executive of Allica Bank, said: “Record low levels of SMEs are seeking finance,” stressing the need for a reboot in the SME finance market to support the Government’s growth mission. The shift towards low-risk, collateral-backed lending has discouraged SMEs from borrowing, with only 5% of bank lending now in the form of overdrafts, down from 31% in 1998.
Salon owner faces financial crisis
Kerry Larcher, a 50-year-old salon owner from Hornchurch, East London, is facing the potential loss of her business and home due to “crippling” tax rises introduced in the October Budget. The additional £23,000 in annual costs, primarily from increased National Insurance contributions and business rates, has left her in a dire situation. “I have been crying myself to sleep,” she told the BBC. The British Hair Consortium has urged Chancellor Rachel Reeves to halve VAT for salons, arguing that it could prevent the industry’s collapse. Conservative MP Julia Lopez echoed these concerns in Parliament, stating that many salon owners, like Kerry, are contemplating closure.
Wealth exodus hits CGT receipts
Capital gains tax (CGT) receipts in the UK have decreased by over £1bn, falling to £13bn in the year ending March 2025, a 10% drop from the previous year. Robert Salter, director at Blick Rothenberg, suggests the decline may be linked to high-net-worth individuals leaving the UK following the abolition of the non-dom tax regime. Jonathan Riley, head of private client at Fladgate, points out that many wealthy business owners have relocated abroad before selling their firms to avoid high UK taxes. However, some attribute the drop in CGT receipts to falling financial asset values and a slowdown in dealmaking due to rising interest rates.
Manufacturers cut jobs at alarming rate
Manufacturers in the UK are experiencing the fastest job cuts in over four years, driven by soaring energy costs and tax increases imposed by Chancellor Rachel Reeves. The Confederation of British Industry (CBI) reported a slight easing in manufacturing output for the quarter ending in April, indicating some resilience in the sector. However, many manufacturers are grappling with the “cumulative burden” of rising taxes and a higher national living wage, leading to significant employment reductions. Ben Jones, CBI’s lead economist, noted that manufacturers are “gloomy about their prospects” due to financial pressures and market instability. The CBI’s findings align with Make UK’s forecast of a 0.5% contraction in manufacturing output this year, marking the first decline in the first quarter in a decade.
Retailers bask in spring sales surge
Retailers experienced their best quarter since summer 2021, with a 0.4% increase in sales in March, driven by favourable weather conditions. The Office for National Statistics (ONS) reported a 1.6% rise in retail sales for the first quarter, marking the third consecutive monthly increase. “Clothing stores were the subsector with the strongest growth,” noted the ONS, with clothing and shoes sales up 3.7%. Despite the positive figures, experts like Professor Joe Nellis from MHA cautioned that this may be a “false dawn,” as inflationary pressures and upcoming tax increases could dampen consumer confidence. Oliver Vernon-Harcourt from Deloitte highlighted the resilience of the retail sector, attributing the sales boost to the arrival of spring sunshine. However, uncertainties surrounding tariffs and global trade could pose risks to future spending.
Post Office strikes £1.75bn banking deal
The Post Office is set to announce a significant £1.75bn agreement with numerous banks, enhancing its financial position. This new banking framework, launching next Wednesday, is expected to generate an additional £500m for the government-owned entity, increasing its annual revenue from £250m to approximately £350m. In exchange for these funds, the Post Office will commit to improving services for bank customers using its 11,500 branches. Participating banks include Barclays, HSBC, Lloyds Banking Group, NatWest Group, and Santander UK. Sky News notes that the Financial Reporting Council is investigating EY over its audit of the Post Office.
Blackrock’s Fink sees UK assets rising
BlackRock’s chairman has labelled British assets as “undervalued” and expressed optimism about increased investment in the UK economy. Larry Fink said: “I have more confidence in the UK economy today than I did a year ago,” highlighting the Labour government’s efforts to ease planning regulations and cut red tape. Fink noted that BlackRock could invest more of its $11.6trn assets in the UK, as he believes the market has been overly pessimistic.
Chancellor must U-turn on net zero
Liam Halligan writes in the Sunday Telegraph on how Rachel Reeves may finally be realising that Labour’s net zero policies are preventing the growth the country desperately needs. Halligan points to the vast costs of implementing the Climate Change Act while oil refineries and steelworks close across the country. High electricity prices make households and business poorer while jobs are at risk from over-taxed oil and gas businesses operating in the North Sea. Halligan, an advocate for a gradual move away from fossil fuels, asserts that, “unless Labour performs a major policy about-turn soon to cut energy costs and ease “net zero” targets, the growth that [the Chancellor] and her party so desperately needs will be lost to the wind.”
Mervyn King criticises Reeves’ fiscal rules
Former Bank of England Governor Mervyn King has expressed strong criticism of the forward-looking fiscal rules established by Chancellor Rachel Reeves. In a statement to the House of Lords, King argued that these rules impose an additional burden on public finances. He highlighted that the rules, which rely on forecasts from the Office for Budget Responsibility (OBR), allow for excessive public spending without generating sufficient income for the Government. King suggested that the Government should reconsider its approach to managing public debt, advocating for a fixed date for debt reduction rather than a rolling estimate. He also indicated that tax increases may be necessary to address rising defence spending and reduce the budget deficit.
Police and employers crack down on staff working multiple jobs
The Times reports on the increase in workers hoodwinking their employers into believing they work only for them. The trend of working from home has led to people working multiple full-time jobs without their workplaces being aware, with the latest report by the National Fraud Initiative revealing 23 cases in a recent pilot of London boroughs leading to half a million pounds in overpaid salaries over just a few months. One civil servant from Whitechapel, Kashim Chowdhury, last week appeared in court charged with fraud after allegations he held three full-time government jobs simultaneously. Rachael Tiffen, director of public sector at the fraud database company Cifas, said: “The rise of polygamous working presents a growing risk to organisations, not only in terms of lost productivity but also fragmented loyalty, data security threats and employee burnout.”
AI fears loom over job security
More than a quarter of workers are concerned that artificial intelligence (AI) may lead to job losses, according to a survey by Acas, which advises on workplace relations. The poll revealed that 26% of employees fear job cuts due to AI, while 17% worry about potential errors and 15% are anxious about weak regulation. Acas stressed the need for employers to establish clear policies regarding AI use and to engage in open discussions with staff. Neil Carberry, chief executive of the Recruitment and Employment Confederation, commented: “AI will transform the job market, but history shows technology creates new opportunities even as it disrupts existing roles.” He highlighted the importance of Skills England in addressing skills gaps as technology evolves.
Nightclub owner guilty of £4.9m tax fraud
Paul Kelly, a nightclub owner from Thornton Cleveleys, and his accountant John Parry have been convicted of a £4.9m tax fraud. The trial at Preston Crown Court revealed that Kelly, 63, evaded tax payments with Parry’s assistance, leading to charges of cheating the public revenue and perverting the course of justice. HM Revenue and Customs (HMRC) reported that Kelly spent significant amounts on luxury items, including a yacht and high-end cars. The pair is set to be sentenced on 25 July.
BBC News
Markets
On Friday, London was a bit subdued with the FTSE 100 closing up 0.09% at 8415.25 and the Euro Stoxx 50 closed up 0.77% at 5154.12. Across the Atlantic, Wall Street delivered a mixed performance. The tech-heavy index led the way, buoyed by strong corporate earnings. Alphabet, Google’s parent company, reported well-received first-quarter results.
Shein & Temu are hiking US prices by as much as 377% ahead of tariffs.
China said it was “fully confident” of achieving its 5% growth target for this year despite its trade war with America.
Sleepless nights lead to spending sprees
According to a recent survey by Intuit Credit Karma, a significant number of Britons are struggling with financial anxiety, with 32% saying it keeps them awake at night. The survey revealed that nearly half of Britons (46%) experience poor sleep multiple times a week, averaging just 5.7 hours per night. Some 24% admit to impulse spending when tired, with 15% more likely to purchase food or takeaways. Akansha Nath, general manager for international at Intuit Credit Karma, said: “When you’re tired, it’s easy to let your spending slip and impulse buys can feel more tempting.” The survey, conducted by Opinium with 2,000 UK adults, highlights the link between sleep deprivation and financial decision-making.
Customer service at HMRC is slipping again
Imogen Tew reports in the Sunday Times on how £50m of extra investment into HMRC last year saw an improvement in customer services, with targets for answering calls met in the last quarter of the year and response by post almost hitting the target. Caroline Miskin from the Institute of Chartered Accountants in England and Wales said: “The additional £51m investment was starting to have some impact.” However, she adds: “It is extremely disappointing that the latest information suggests that those improvements have not been sustained.” She points to a list of gripes from taxpayers including long waiting times, calls being cut off and delays to repayments.
Insurance tax hits record £9bn
The soaring costs of car, home, and pet insurance have resulted in the Government receiving a record £8.88bn from insurance premium tax in the 2024-25 tax year, up from £8.15bn the previous year. The tax, charged at 12%, has remained unchanged since June 2017, but rising premiums have significantly increased revenue. The average comprehensive motor insurance policy rose from £416 in early 2022 to £621 by the end of the year, while home insurance increased from £307 to £403. The Association of British Insurers (ABI) has described the tax as an “unfair tax on a responsible purchase,” urging for a reduction once the Government’s fiscal issues are resolved.
Parents pass on assets early to avoid Labour tax grab
The Daily Telegraph reports on the rise in parents gifting huge sums to their children to pay deposits to avoid inheritance tax bills. Over 110,000 home buyers received at least £100,000 from a family member last year, an increase of 8% compared with 2023. Parents are also gifting large sums from their pensions and bringing forward their retirements so they spend their pension rather than handing it to Labour. Ann Bradshaw, a former NHS nurse, said the decision was made final when the Chancellor brought pensions into inheritance tax. “Pensions were always a safe haven, you could put your money in there. But it was no longer safe. Instead of Rachel Reeves spending our pension, we decided that we would spend our pension.”
Over-60s hold nearly £3trn in property
Homeowners aged 60 and over possess a staggering £2.95trn in property, with 98% mortgage-free, revealing a significant generational housing divide in the UK. According to Savills, the over-60s control 56% of owner-occupier housing wealth, while those under 35 hold just 6%. Lucian Cook, director of residential research for Savills, noted: “The baby boomers have continued to build wealth, having paid off their mortgage debt.” The report highlights that younger generations face challenges in climbing the housing ladder, with the under-45s holding £1.56trn in property, of which 47% is mortgaged. Experts predict a substantial transfer of wealth from older generations to younger ones in the coming decade, potentially reshaping the property landscape
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.