Business news 3 February 2026
UK markets are brushing record highs, but for small and medium-sized businesses the operating environment remains difficult. Energy costs, tax pressure and a growing reluctance to take commercial risk are weighing on investment decisions, while insolvency notices continue to stack up across a wide range of sectors. Today’s news highlights a widening gap between market optimism and day-to-day trading reality for businesses selling on credit.
James Salmon, Operations Director.
SME & Economic Stories
Energy costs deter investment
High UK energy prices are discouraging American firms from investing, according to Sir Keir Starmer’s adviser on trade and investment, Varun Chandra. Executives at a British-American Business conference warned that expensive power and high taxes are undermining the UK’s competitiveness, with calls for greater use of North Sea oil and gas to bring costs down.
Why it matters: High energy costs squeeze margins, weaken cashflow and increase the risk of late payment or failure among energy-intensive customers.
Entrepreneurs struggle with risk-taking
Arm CEO Rene Hass says UK start-ups are less willing to take risks than their Silicon Valley counterparts, partly due to limited venture capital and a lower tolerance for failure. He warned that a lack of scale and investor appetite is holding back growth and innovation.
Why it matters: Risk-averse investment slows business growth, lengthens payment cycles and increases reliance on trade credit rather than fresh funding.
Middle earners hardest hit by tax threshold freeze
New analysis from the Institute for Fiscal Studies shows the income tax threshold freeze will hit middle earners harder than higher earners. Workers on £48,000 are expected to pay over £600 more in tax by 2031, while those on £150,000 will pay less than £400 extra.
Why it matters: Higher personal tax burdens reduce disposable income, which can quickly feed through into weaker consumer demand and slower customer payments.
Manufacturing recovery fails to save jobs
UK manufacturing activity rose to a 17-month high in January, but firms continued to cut jobs for the 15th month running. Rising electricity costs, higher National Insurance and looming carbon border taxes are forcing manufacturers to protect margins despite stronger output.
Why it matters: Job losses and higher production costs increase insolvency risk across supply chains, particularly where credit terms are long.
Chancellor plans Treasury job cuts
The Chancellor plans to cut around 300 Treasury roles by 2030 as part of a wider effort to reduce Whitehall administration costs. Trade unions warn that reducing economic expertise could undermine growth policy.
Why it matters: Government retrenchment can slow public spending decisions, affecting contractors and suppliers reliant on timely payment.
Property & Housing
House prices climb in January
UK house prices rose 0.3% in January, with annual growth now at 1%, supported by lower mortgage rates and improving affordability. Buyer enquiries have returned to 2024 levels, though approvals remain below longer-term averages.
Why it matters: Housing stability supports consumer confidence, but affordability pressures still limit discretionary spending for many households.
Fewer £1m homes in ‘rebalanced’ market
The number of £1m-plus homes in Britain fell by nearly 30,000 over the past year as higher borrowing costs and taxes cooled demand. London and the South-East saw the sharpest declines.
Why it matters: A cooling high-end market can ripple into construction, professional services and luxury supply chains.
Trade, Industry & Technology
UK warns EU supply chains at risk
The UK is lobbying the EU over its “Made in Europe” initiative, warning it could exclude British firms from key supply chains. Officials fear disruption to sectors such as automotive manufacturing.
Why it matters: Supply-chain disruption raises costs and increases counterparty risk when trading across borders on credit.
Tax raid could hit law firm jobs
Proposals to take up to 75% of interest earned on client accounts could cost law firms thousands of jobs, according to industry analysis. Some firms are reportedly at risk of collapse if profits fall sharply.
Why it matters: Professional services failures often leave unsecured trade creditors exposed and unpaid.
Software giants rattled by AI fears
Shares in major software firms have fallen as investors worry AI could disrupt their business models. Analysts argue the opposite may be true, with strong platforms potentially gaining market share.
Why it matters: Tech sector volatility can quickly affect payment behaviour among fast-growing but cash-hungry clients.
World models emerge as next AI battleground
Experts suggest current AI systems lack “world models” — an understanding of how the real world behaves — limiting future progress. With training costs rising, developers are shifting focus to deeper reasoning.
Why it matters: Slower AI gains could temper productivity improvements businesses are counting on to offset rising costs.
Musk merges SpaceX and xAI
Elon Musk announced SpaceX will acquire xAI in a deal reportedly valued at $1.25 trillion, citing ambitions for space-based data centres. SpaceX is also said to be considering an IPO this year.
Why it matters: Mega-deals can reshape tech investment flows, but offer little immediate relief for everyday SME cashflow pressures.
Market Snapshot – 3 February 2026
Global markets remain resilient, with equities sitting at or near record highs, despite sharp volatility in commodities and ongoing uncertainty around energy prices, geopolitics and interest rates. For UK businesses, the picture is mixed: confidence in growth is holding up in markets, but cost pressures and instability remain close to the surface.
Equity Markets
UK
The FTSE 100 is trading at 10,337.95, marginally lower on the day but still close to the record high reached on Monday after a strong 1.15% rally. The index has shrugged off recent commodity weakness, with gains broad-based across most sectors. Mining and oil stocks were among the few laggards, reflecting lower metals and oil prices.
Europe
European equities continue to power higher.
- Euro Stoxx 50: 6,044.26 (+0.61%)
- DAX: 24,982.52 (+0.75%)
- CAC 40: 8,200.45 (+0.24%)
The broader Stoxx 600 rose 0.5%, extending its record run. Investors appear increasingly comfortable that inflation and interest rates are stabilising, even as commodity-linked stocks remain volatile.
United States
US markets were steady rather than exuberant.
- S&P 500: 6,976.44 (was up 0.54% yesterday) but in premarket up to 7013.
- Dow Jones: 49,407.66 (rose 1.05% yesterday) but in premarket up to 49499.
Strong US manufacturing data has supported sentiment, particularly among smaller firms, with the Russell 2000 rising 1%. However, investors are cautious ahead of a change in Federal Reserve leadership later this year, which historically has coincided with market pullbacks.
Asia
Asian markets were notably strong overnight.
- Nikkei 225 surged 3.92% to 54,720.66
- Hang Seng rose 0.22%
The MSCI Asia Pacific Index is on track for its best day since April, driven by renewed optimism around technology and AI-linked stocks.
Currency Markets (Sterling Perspective)
Sterling remains relatively firm, reflecting calmer expectations around the Bank of England and improved risk sentiment.
- GBP/USD: 0.7312
- GBP/EUR: 0.8627 (sterling close to a five-month high vs the euro)
The US dollar strengthened briefly following strong US data but has since weakened again as investors returned to riskier assets and precious metals rebounded. The Indian rupee strengthened sharply after the US cut tariffs on Indian goods, while the Australian dollar jumped following a surprise rate hike.
For UK businesses trading internationally, currency markets remain active but not disorderly, with no signs yet of stress-driven moves.
Commodities
Energy
Oil prices have fallen back as geopolitical risks eased.
- Brent crude: $65.62 (-1.03%)
- WTI crude: $61.54 (-0.97%)
Comments from President Trump about talks with Iran removed some of the risk premium from oil markets. While this has weighed on oil majors’ share prices, lower oil prices may offer some relief to fuel and transport costs — though broader UK energy pricing remains structurally high.
Natural gas prices also dropped sharply, helped by warmer weather forecasts, easing immediate supply concerns in both the US and Europe.
Metals
Precious metals have been extremely volatile. After historic sell-offs late last week, gold and silver rebounded sharply:
- Gold: $4,921 (+5.6%)
- Silver: $86.39 (+12.2%)
Base metals were more mixed. Copper remains well below last week’s record highs, though signs of dip-buying from China helped stabilise prices. Mining stocks rebounded strongly in Europe, reflecting this recovery.
What This Means for UK Businesses
Markets are currently signalling confidence in economic resilience, but not complacency. Equity investors appear willing to look past near-term volatility, while commodity markets are reminding everyone how quickly costs can swing.
Insolvencies and Winding-Up Notices
Appointments of Administrators
- ALPKIT LTD
- ECRUBOX DIGITAL LTD
- JOHNSONS 1871 LIMITED
- LK BENNETT FASHION LIMITED
- MOCKBA LTD
- SHACKLEFORD PIANOS LIMITED
Appointments of Liquidators
- ACUMEN 4 HOLDINGS LIMITED
- AGJ CONSULTANCY LTD
- AMBIENT PRODUCTIONS LIMITED
- ANSH INFOTECH LTD
- APPLE LIGHTING LTD
- ASHFORTH CONSULTING LIMITED
- ATB TRANSFORM LTD
- CARSPARK LIMITED
- CENC BATH LTD
- CLOVATEK LTD
- GIGAHYPE LTD
- HERONDATA SALES LIMITED
- IHATCH-APPS LTD
- JARVIS-EVANS LTD
- LAPIS CONSULTANCY LIMITED
- NERVE CONSULTANTS LTD
- P & M HOMES LIMITED
- PEGASUS PROPERTY MANAGEMENT (NEW FOREST) LTD
- PHI-MEDICS LIMITED
- PTKT CONSULTING LIMITED
- RENROC ENTERPRISES LIMITED
- RENROC INDUSTRIES LTD
- SB WEALTH MANAGEMENT LIMITED
- SECRETARIAL SERVICES LIMITED
- SINGULARITY NETWORKS LIMITED
- SJH PROCESS SOLUTIONS LTD
- VEHICLES SOLUTIONS (UK) LIMITED
- VERICOM CONSULTANTS LIMITED
- VICTORY DIRECT LIMITED
Petitions to Wind Up
- FMEC GROUP UK LTD
- FOODY LIFE LTD
- INDIAN ARK RESTAURANT LTD
- JAKS BEAUCHAMP PLACE LTD
- MONSOON MANAGEMENT LIMITED
- NEW STAR 3 LTD
- SAMSON COLLIER LTD
- SMART-TILT LTD
- THE CHILDCARE VILLAGE LIMITED
How CPA Membership Could Help
Rising costs, tighter margins and growing insolvency lists all point to one thing: unpaid invoices age badly. CPA members use CreditCare reports, monitoring and early recovery support to spot risk sooner, protect cashflow and reduce write-offs before problems escalate.
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