Business news 6 October 2025
The week opens with mounting fiscal tension ahead of the autumn Budget. The Office for Budget Responsibility’s projections suggest lower growth and persistent inflation, prompting warnings that Chancellor Rachel Reeves may require up to £80bn in tax rises. Business confidence has slipped, with small firms anxious about new taxes and rising costs. Meanwhile, markets are digesting political shocks in France and Japan, OPEC+’s surprise production rise, and record-breaking highs on Wall Street.
James Salmon, Operations Director.
Top SME-Focused Stories
1. OBR projections spell fiscal pressure for Reeves
The Office for Budget Responsibility’s latest forecasts show weaker productivity and higher inflation. JP Morgan estimates Reeves may need £50–£80 billion in tax rises this Parliament. Critics from both sides call for a clearer reform vision rather than piecemeal increases.
Implication for SMEs: Possible corporate and income tax adjustments could tighten liquidity and reduce consumer demand.
2. SMEs fear new tax rises ahead
A survey by NFU Mutual found 70% of sole traders and microbusinesses expect short-term challenges, with inflation and cost of living still key threats. Younger entrepreneurs are most anxious—yet 75% remain optimistic about growth in 2026.
Implication: Late payments and credit risks likely to rise as confidence softens.
3. Housing market jitters over property tax speculation
Speculation over capital gains and property tax reform has cooled demand for homes above £500k, according to Zoopla. Halifax and RICS reports due this week may show further slowdown.
Impact: Property-related SMEs face softer demand and delayed transactions.
4. Wetherspoon warns of inflation threat from tax hikes
JD Wetherspoon posted revenues of £2.12bn (+4.5%) and pre-tax profits of £81.4m (+10.1%), but shares fell after chairman Tim Martin warned tax and energy levies could fuel inflation.
SME takeaway: Policy-induced cost increases may erode margins across hospitality and retail.
5. Age UK pleads for charity tax relief
Age UK has urged the government to exempt charities from the upcoming rise in employer National Insurance. Many charity shops report weaker donations and increased costs.
SME takeaway: The change highlights the broader strain on labour-intensive sectors.
6. Manufacturing under strain but still investing green
Make UK reports 80% of manufacturers plan to expand green investment within five years, though higher business rates on efficiency upgrades remain a barrier.
Relevance: Many SME suppliers face similar disincentives that could hinder innovation.
7. Bank of England warns against deregulation
Andrew Bailey cautioned that slashing regulation to spur growth risks financial instability. The FRC also reshuffled enforcement leadership to speed up investigations.
Relevance: SME auditors and accountants may see faster case resolutions but stricter scrutiny.
8. International outlook mixed
- France: PM Lecornu’s resignation deepened market turbulence; the CAC 40 fell 0.7%.
- Japan: Stocks soared 4% as new LDP leader Sanae Takaichi pledged fiscal expansion.
- Germany: Introduced tax breaks for working pensioners to tackle labour shortages.
️ 9. OPEC+ to raise output again
OPEC+ will increase production by 137,000 b/d in November, following a similar rise last month. Traders had feared a larger boost; Brent crude edged slightly higher.
Impact: Potential easing of fuel prices but continued volatility in energy costs.
10. UK economy faces “savings shock”
Revised ONS data slashed household savings estimates by 4.1 points, casting doubt on consumers’ ability to support growth. Economists warn that hopes of a post-Budget spending rebound may be misplaced.
11.️ Services slowdown surge in new business formations
The UK’s dominant services sector hit a five-month low in September, with the S&P Global PMI slipping to 50.8 from 54.2, signalling near-stagnant activity. Economists warn that political uncertainty and rising staff costs are curbing demand.
12.️ Surge in new business formations
Despite the slowdown, entrepreneurial momentum remains strong — the Department for Business and Trade reports a rise to 5.7 million active UK businesses, up 191,000 year-on-year, driven mainly by self-employed start-ups and one-person firms.
Market Snapshot
Swedish krona: Best G10 performer (+17.7% YTD); Canadian dollar (+3.1%) lags.
FTSE 100: Holding firm near record highs as global investors eye UK assets as a “US alternative.”
CAC 40: -0.7% amid French political upheaval.
S&P 500: Closed Friday at its 31st record high this year, though analysts warn gains may be unsustainable.
Brent Crude: Slightly higher at ~$89/bbl after OPEC+ confirmed modest output rise.
Gold: Near $3,945/oz as investors hedge against US shutdown risk.
USD/JPY: 150.44 after Takaichi’s win; yen weakness boosts exports.
With potential tax rises ahead, strong credit control is more vital than ever. CPA members gain tools to safeguard cash flow, manage overdue accounts, and stay resilient through economic shifts.