Business news 5 March 2026
Geopolitics and rising costs are dominating the business outlook today. The escalating conflict in the Middle East is pushing up oil and gas prices, threatening higher inflation, mortgage rates and energy bills. Meanwhile UK firms are grappling with rising taxes, higher employment costs and pressure from business rates.
Global markets have stabilised after sharp earlier falls, but volatility remains high as investors assess the impact of the conflict and possible disruption to energy supplies. For SMEs trading on credit, these conditions often lead to slower payments, tighter cashflow and increased insolvency risk.
James Salmon, Operations Director.
SME & Business Environment
Middle East crisis could force tax rises
Economists warn the Middle East conflict could worsen the UK’s fiscal position, potentially forcing further tax increases. Analysts say rising oil prices could increase inflation and strain public finances just as the Government considers higher defence spending commitments. The Institute for Fiscal Studies estimates meeting NATO spending targets could require tax rises equivalent to 3–3.5 percentage points on income tax or VAT.
Why it matters: Higher taxes and inflation reduce disposable income and business margins, increasing the likelihood of slower payments and cashflow pressure for SMEs.
Business rates pressure intensifies in London
Hospitality leaders are calling for urgent business rate reform as costs continue to rise. London businesses already contribute roughly one-third of the UK’s business rates revenue, and some hotels have seen rates rise by more than 115% over three years. Industry groups are proposing a new “hybrid business rate” that would include a levy on online sales to reduce the burden on physical premises.
Why it matters: Higher fixed costs reduce resilience among SMEs and can lead to delayed payments to suppliers.
£100k tax cliff edge discouraging ambition
The UK’s £100,000 income threshold is being criticised for discouraging productivity and career progression. Research suggests many professionals deliberately limit their earnings to avoid losing personal allowances. Business leaders argue the system distorts incentives and should be reformed to support economic growth.
Why it matters: Structural tax distortions can reduce investment and productivity growth, ultimately affecting business confidence and payment behaviour.
Services firms cutting jobs while raising prices
The UK services sector continues to grow but companies are cutting jobs and increasing prices to offset rising costs. February’s services PMI stood at 53.9, slightly down from January but still indicating expansion. Firms cited higher payroll costs, technology investment and tax changes as key pressures.
Why it matters: Cost pressures often translate into higher prices and slower supplier payments across supply chains.
Construction sector warns housing target at risk
Industry leaders warn the Government’s goal of building 1.5 million homes may not be achievable under current policies. Rising National Insurance contributions, regulatory costs and labour shortages are increasing pressure on SME contractors and suppliers.
Why it matters: Financial strain in construction supply chains increases the risk of delayed payments and insolvencies among smaller subcontractors.
Economy & Policy
Energy bills could rise sharply
Energy analysts warn the price cap could increase to around £1,800 from July as gas prices surge following the Middle East conflict. Economists say sustained oil and gas increases could add roughly one percentage point to inflation.
Why it matters: Higher energy costs squeeze both household budgets and business margins, often leading to slower customer payments.
Mortgage rate cuts halted
Mortgage lenders are pausing planned rate cuts due to rising swap rates and inflation fears linked to higher energy prices. Some analysts warn borrowing costs could even rise again if geopolitical tensions persist.
Why it matters: Higher borrowing costs reduce consumer spending and can weaken customers’ ability to pay suppliers on time.
Oil price surge could delay interest rate cuts
Economists warn rising energy prices may complicate the Bank of England’s plans to lower interest rates this year. Some analysts say the Bank could even raise rates again if inflation accelerates.
Why it matters: Higher interest rates tighten financial conditions and increase late payment risk across the economy.
UK growth constrained by regulatory “rationing”
Economic analysts argue the UK’s growth potential is limited by restrictive policies affecting land use, energy development and capital investment. Critics say reform is needed to unlock productivity growth.
Why it matters: Structural economic weakness increases financial stress for businesses and their customers.
Industry & Investment
Foreign investors target undervalued UK firms
Overseas investment into UK companies surged to £27.4bn in the final quarter of last year. Analysts say foreign buyers are attracted by relatively low valuations and strong global interest in UK businesses.
Why it matters: Increased investment can strengthen businesses, but foreign acquisitions may reshape supply chains and payment relationships.
UK tech sector remains globally competitive
Despite layoffs and AI-driven workforce changes, the UK continues to host one of the world’s largest technology ecosystems. Most technology executives report actively adopting AI tools, though some companies are reducing headcount as roles evolve.
Why it matters: Technological change may disrupt employment but also drive productivity and new business opportunities.
Employment & Immigration
Labour MPs challenge immigration reforms
More than 100 Labour MPs have urged ministers to reconsider immigration changes that would favour higher-paid workers while making it harder for lower earners to gain residency. Critics say the reforms could harm economic competitiveness.
Why it matters: Labour shortages in key sectors can disrupt supply chains and increase costs for SMEs.
Global Market Snapshot
Equities
Markets stabilised after earlier turmoil caused by escalating tensions in the Middle East.
European shares rebounded on Wednesday following their worst two-day decline in months. The STOXX Europe 600 rose 1.4%, while the FTSE 100 climbed to 10,607.95.
US equities rallied overnight after strong economic data showed resilient growth and cooling inflation pressures. Technology stocks led the gains, pushing the Nasdaq to 22,807.48 while the Dow Jones finished at 48,739.41.
Asian markets rebounded sharply. South Korea’s Kospi surged 9.6%, its biggest rise since the global financial crisis, following the previous day’s dramatic sell-off. Japan’s Nikkei 225 reached 55,278.06, while Chinese and Hong Kong markets were more mixed amid heavy mainland selling.
Currencies
Sterling strengthened slightly against the dollar and euro as markets digested the latest geopolitical developments.
- GBP/USD: 1.3351
- GBP/EUR: 1.1487
The dollar remains volatile as investors seek safe-haven assets during geopolitical uncertainty.
Commodities
Energy markets remain the biggest concern.
Oil prices surged following reports of military escalation and disruption to shipping routes in the Persian Gulf.
- Brent crude: $82.93 per barrel
- WTI crude: $76.44 per barrel
Gold continues to benefit from safe-haven demand, trading above $5,150 per ounce.
Summary
Markets experienced a volatile 24-hour period dominated by the Iran conflict. Wednesday’s European cash session saw a relief rally after a brutal two-day selloff, with the STOXX 600 up 1.4%. US markets closed strongly overnight on encouraging economic data, with the Nasdaq 100 jumping 1.7%. Asian markets rebounded dramatically this morning, led by South Korea’s historic 9.6% surge after Wednesday’s record crash, though Hong Kong faced record mainland selling pressure.
Oil prices remain the critical variable, with WTI and Brent both rallying 3-4% overnight as the Strait of Hormuz closure forces production cuts and export suspensions across Asia. Central banks are on high alert for inflation impacts, though policymakers stress they’re waiting for more data before acting. The dollar’s safe-haven status has reasserted itself, while gold holds above $5,150 as geopolitical uncertainty persists.
Insolvency Watch ️
Administrations
- Draft House Holding Limited
- Leaf Creative Design Limited
- Premiserv Ltd
- Smartbox.ai Limited
- Swift and Whitmore Limited
Liquidations
- Apollo Project Management Services Ltd
- Bascomb & Drew Developments Ltd
- Bellarion Holdings Limited
- Bellarion Limited
- Ben Simmons Consulting & Coaching Limited
- Birsen Consulting UK Ltd
- Breakwater Associates Limited
- Brockwell Consulting Limited
- C ‘N’ S Sports Stars Limited
- Capital Plans Limited
- CMJ Consulting Limited
- Co-Mech Ltd
- Corin Group Holdings Limited
- Cosi Ross Limited
- Cranemere Africa Limited
- Data Creative Ltd
- David R Saunders Limited
- DTM Consulting Services Limited
- Ensco 1067 Limited
- Eurobeauty Limited
- Fasteon Ltd
- Galileo Engineering Services Limited
- Global Drug Survey Limited
- Gourmet & Company Limited
- Grant Associates (Chichester) Limited
- Green Blu Ltd
- Green the Grey Ltd
- Harrison Eastoft Limited
- Hypericum UK Ltd
- Ilford and Dagenham Properties Limited
- Integral DevOps Limited
- J J Properties (NW) Limited
- J Passi Editing Ltd
- Jamieson Brown Associates Limited
- Kirti Shah Limited
- Lawfield Limited
- Lee Consulting Limited
- Level Consulting Limited
- Macson Investments Limited
- Matlucha Management Limited
- MH Global Consultancy Limited
- MIHK Solutions Ltd
- Mike Phillips Consulting Ltd
- Oakwood Consultants Limited
- Orchis Living Limited
- P&P Cybersecurity Ltd
- Page Tek Limited
- Palgrave Ltd
- Parigo Horticultural Co Limited
- Paul Nash Properties Limited
- Peter Spencer Holdings Limited
- Profile Industrial Roofing Services Limited
- Quintessential Promotions Limited
- R.H.M. Contracts Limited
- Roding Valley Properties Limited
- Saffrons Garage Ltd
- Sakin Holdings Ltd
- Sattenham Consulting Limited
- Singh Agile Content Design Limited
- SK-CRS Ltd
- Snowbot Limited
- Swift IT Consulting Ltd
- Tarrashourne Limited
- TGL Contracts Ltd
- The Holdsworth Distillery Limited
- Tilley Roofing (Holdings) Ltd
- Trade Door Properties Limited
- Universal Umvelt Ltd
- W.J. Holdings Limited
- Wright Advisory Ltd
- Yorkshire Eye Surgery Limited
Winding-up petitions
- Aberford Traditional Ltd
- Alrate George! Waste Removals Ltd
- Autozone (UK) Limited
- Bayfield Homes Ltd
- CBT Limited
- Cawoods.net Limited
- Clark & Son (Long Melford) Limited
- Climate Care UK Heating Services Ltd
- Customisedbuilders Ltd
- Hoyte Maintenance Limited
- Jliral Ltd
- Kennacott Management Limited
- Maddox Homes Limited
- Motorino London Ltd
- The Wright Pub Group Limited
- Veg Express UK Ltd
- WP Services Ltd
Winding-up order
How CPA Can Help
Late payments and insolvencies tend to rise during periods of economic uncertainty and rising costs. If your business supplies goods or services on credit, protecting your cashflow becomes even more important.
The Credit Protection Association helps businesses recover overdue accounts quickly and professionally while maintaining valuable customer relationships. Our services include company credit reports, debtor monitoring and effective recovery processes designed to improve payment performance.
Why not ask how CPA can help protect your cashflow?
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.