Business news 7 January 2026

UK businesses enter 2026 facing a complex mix of optimism and risk. Stock markets have reached record highs, small business confidence is improving and IPO activity has picked up, yet insolvencies continue, employment sentiment is weakening and households are under renewed financial pressure. For SMEs that sell on credit, today’s news reinforces a familiar message: confidence may be returning, but cash flow risk has not gone away.

James Salmon, Operations Director.

SME-focused and economic stories

Britain gets a chill

Your writer took a spill on his evening run last night on some black ice so this is particularly personal.

A wave of Arctic air has swept across Europe, bringing freezing temperatures and heavy snowfall that have disrupted travel and strained energy systems. Rail and bus services have been suspended in several areas, flights have been cancelled, and power outages have been reported as infrastructure struggles under the conditions.

The cold snap has driven power demand sharply higher.

In England, temperatures fell as low as –12.5°C, and authorities have warned that disruption is likely to continue into Wednesday.

Why this matters for UK SMEs selling on credit

• Prolonged travel and logistics disruption can delay deliveries, invoicing and project completion, slowing cash inflows.
• Businesses dependent on European supply chains may face knock-on payment delays from customers affected by disruption.
• Sectors such as travel, hospitality, events and retail are likely to see short-term cash-flow stress, increasing late-payment risk.

Employers brace for job cuts as costs rise

Employers are preparing for layoffs as payroll costs increase, according to the Institute of Directors. Headcount expectations fell further into negative territory in December, while overall business confidence remains deeply depressed. Hiring freezes are widespread, with firms calling for lower taxes, reduced employment law changes and simpler regulation to restore confidence.

Why it matters to SMEs selling on credit:
Job cuts weaken demand and increase late-payment risk across supply chains.

Phoenixism costs taxpayers nearly £850m a year

The practice known as “phoenixism” is costing UK taxpayers close to £800m–£850m annually, according to HMRC analysis. Phoenixism occurs when company directors place a business into liquidation and then restart a new company, often with the same management and activities, but free of old debts and unpaid taxes.

HMRC data suggests phoenixism accounted for around £840m, or 22% of the £3.8bn in tax losses recorded in the 2022/23 tax year. Louise Gracia, professor at Warwick Business School, warned that once businesses see phoenixism as financially advantageous, there is a real risk they will repeat the cycle.

Why this matters for UK SMEs selling on credit

• Suppliers are often left with unpaid invoices when a company collapses and re-emerges under a new name.
• Recycled directors can appear legitimate while carrying hidden insolvency risk.
• Phoenix activity increases the likelihood of repeat bad debts across supply chains.

For SMEs offering goods or services on credit, this underlines the importance of director checks, trading-history reviews, and ongoing monitoring, not just company-name checks — especially in sectors with high insolvency rates.

Concerns over Labour net-zero alignment with EU rules

Britain could be locked into future EU net-zero regulations without direct votes in Parliament under Labour’s proposed plans, according to critics. The proposals would align the UK’s carbon credit scheme more closely with the EU’s system, effectively giving Brussels influence over how carbon pricing and related rules evolve.

Under the plans, changes to EU net-zero rules could automatically take effect in the UK. Opponents argue this would mark the first post-Brexit instance of Britain adopting EU standards without domestic parliamentary approval, and could increase compliance and operating costs for UK businesses.

Labour says closer alignment would reduce trade friction with the EU and provide long-term regulatory stability, but business groups have raised concerns about cost, control and uncertainty during the transition.

Accountants warn AI advice errors are costing UK businesses

UK accountants and bookkeepers are warning that growing reliance on AI-generated financial advice is already causing real financial losses for businesses. Research from Dext shows that half of UK accounting professionals have seen clients lose money due to errors arising from AI-generated guidance.

According to the survey:

• 31% of accountants encounter client mistakes every week linked to AI advice.
• The most common errors include misinterpretation of expenses (46%), incorrect VAT claims (41%), and faulty business tax planning (34%).
• More than nine in ten accountants believe public AI tools should be regulated or restricted when it comes to financial and tax advice.

Accountants warn that using public AI tools without professional oversight could increase the risk of HMRC investigations, penalties, and business insolvencies. Separate analysis published in October found that almost two-thirds of businesses were using public AI chatbots for advice before consulting their accountant.

70,000 households face sharp mortgage payment rises

Nearly 70,000 homeowners will see large increases in mortgage repayments this year as sub-2% fixed deals expire and rates reset near 5%. For a typical mortgage, this could mean almost £4,000 a year in extra costs.

Why it matters to SMEs selling on credit:
Higher household bills reduce spending and can delay payments to small businesses.

UK services sector grows, but only marginally

The final PMI of 2025 showed UK services activity edging up to 51.4, marking the eighth consecutive month of growth. However, staff numbers fell again, margins remain squeezed and economists warn it will be difficult for the economy to build momentum this year.

Why it matters to SMEs selling on credit:
Marginal growth often leads to cautious payment behaviour and stretched debtor days.

Small businesses show renewed confidence — with caution

A Novuna Business Finance survey found that 84% of small businesses plan to invest in growth in 2026, the highest level in five years. However, more than a third are also cutting fixed costs and building financial reserves.

Why it matters to SMEs selling on credit:
Growth ambitions exist, but cash remains tightly controlled, increasing payment sensitivity.

Demographic shift raises prospect of higher taxes

The Resolution Foundation warns that by 2026, deaths in the UK will outnumber births, shrinking the working-age population and increasing pressure on public finances. Higher taxes are seen as likely over time.

Why it matters to SMEs selling on credit:
Long-term tax pressure can quietly erode customers’ ability to pay on time.

Hospitality sector presses Treasury for further tax relief

UK business groups representing pubs, bars and hotels have held talks with Treasury officials, urging further tax discounts to offset measures introduced by Chancellor Rachel Reeves in her recent Budget. Industry bodies warn that the cumulative impact of the changes could be existential for some hospitality businesses, particularly smaller, independent operators.

The groups are pressing the government to unwind or soften parts of the proposals, arguing that margins in the sector are already extremely tight following years of rising costs, labour shortages and weak consumer spending.

The Treasury has defended its approach, highlighting a three-year transition relief period and pointing to additional support measures. These include plans to ease licensing rules, allowing more venues to offer pavement drinks and host one-off events, alongside other initiatives aimed at supporting pubs and restaurants.

Markets and investment

Global markets remain buoyant, but momentum is showing early signs of cooling after a very strong start to 2026.

UK markets

The FTSE 100 hit a fresh record on Tuesday, closing at 10,122, its second straight day above the 10,000 milestone. The index is now up over 22% year-on-year, driven mainly by mining stocks, defence firms and healthcare. Retailer Next was a standout performer after upgrading its outlook.

This morning, however, the FTSE has pulled back slightly, down around 0.5%, as weakness in oil majors BP and Shell weighed on the index. Despite the dip, sentiment around UK equities remains broadly positive.

Accenture buys UK AI firm Faculty in strategic push

Accenture has agreed to acquire Faculty, a British artificial-intelligence startup, as it accelerates its push to position itself as a global leader in AI-led business services. Faculty employs around 400 staff, all of whom will join Accenture as part of the deal.

Faculty’s CEO, Marc Warner, will become Accenture’s Chief Technology Officer, highlighting the strategic importance of the acquisition. Accenture will also roll out Faculty’s “Frontier” product, which is designed to synthesise and analyse complex business data for decision-making.

European markets

European markets were mixed. The Euro Stoxx 50 remains strong, up 18% over the past year, but individual stocks showed volatility. Adidas fell sharply after a rare downgrade from Bank of America, reminding investors that not all companies are benefiting equally from the rally.

Rightmove sees record Boxing Day surge in housing interest

Rightmove said Boxing Day 2025 was the busiest day ever for visits to its website, signalling a stronger-than-usual seasonal lift in housing market activity as the year ended. Traffic jumped sharply from Christmas Day — typically the quietest day of the year — with visits rising 93% as buyers returned online in large numbers.

While Rightmove did not disclose absolute visitor numbers, the scale of the increase suggests pent-up demand and renewed engagement from would-be buyers heading into 2026.

US markets

Wall Street continues to power ahead. The S&P 500, Nasdaq and Dow Jones all closed at new record highs, supported by strong performances from large tech and consumer names such as Amazon, although Tesla lagged.

Looking ahead, optimism remains high in the US. Goldman Sachs believes the S&P 500 could rise another 12% in 2026, while a Federal Reserve governor suggested that interest rate cuts totalling more than 1% may be needed next year, a signal markets tend to welcome.

Meta delays global launch of new AI smart glasses amid supply constraints

Meta has said it will delay the launch of its latest Ray-Ban Display smart glasses outside the US, citing overwhelming domestic demand and extremely limited inventory. The company said US waitlists have absorbed available supply, forcing it to prioritise the American market.

The AI-powered glasses are developed with EssilorLuxottica, owner of Ray-Ban. The newest model, unveiled in September, includes advanced features such as a built-in teleprompter, underlining Meta’s push to integrate AI into consumer hardware.

Commodities

Commodity markets have been particularly volatile:

• Copper surged to a record above $13,000 per tonne, driven by concerns over potential US tariffs and supply shortages elsewhere.
• Nickel jumped more than 9%, its biggest rise in over three years.
• Gold and silver continued their rallies, reflecting ongoing investor demand for hard assets.
• Oil prices swung sharply. Brent initially rose but then fell back towards $60 a barrel after President Trump said Venezuela would hand over millions of barrels of oil to the US, raising fresh concerns about oversupply in 2026.

Currencies

The pound remains relatively stable but slightly weaker against a strengthening US dollar, which has risen for six of the past seven sessions. Sterling has, however, strengthened against the euro, reaching a 10-week high. Commodity-linked currencies such as the Australian dollar have outperformed.

What this means for UK businesses

Markets are still broadly supportive, but volatility is creeping back in. High commodity prices could push up costs, while currency movements may affect importers and exporters differently. For businesses selling on credit, this mix of optimism and instability reinforces the importance of watching customer cash flow closely, particularly in energy-intensive and materials-dependent sectors.

Insolvency notices

Appointments of liquidators

• ARIUM LIMITED
• BLOSSOM MEDICAL SIGNATORY LIMITED
• BROWN’S OF ENDERBY LIMITED
• CONSOLIDATED DISTRIBUTION HOLDINGS, LTD.
• GOLDWAVE TECHNOLOGY LIMITED
• NO-BREAK POWER LIMITED
• PSSHLPS NO 3 LIMITED
• ROLLS-ROYCE AERO ENGINE SERVICES LIMITED
• ROLLS-ROYCE PLACEMENTS LIMITED
• SASH CONSULTING LIMITED
• USNET LTD
• WESSEX WINCHESTER GP LIMITED
• XTE LIMITED

Appointments of administrators

• CHARMING DESIGNS LTD
• CLEARVIEW CARE LIMITED

Petitions to wind up (companies)

• AA KITCHEN FITTERS LTD
• BIO DIMA LIMITED
• CATER-CONNECT LTD
• DND GROUP LTD
• DORSET BUILDING & ROOFING LTD
• FARM 2 TABLE LTD
• HARIS ARCHITECTURAL SYSTEMS LTD
• J JONES LTD
• JMA JOINERY AND BUILDING SERVICES LTD
• LINEN IDEAS LIMITED
• M MALLINDER BUILDING & JOINERY LTD
• OSWESTRY WALLS LIMITED

CPA membership

Rising insolvencies, cautious employers and volatile markets all point to one thing: credit risk remains high. If you are supplying goods or services on credit, now is the time to tighten checks, monitor customers closely and act early when invoices slip.

CPA members benefit from credit reports, monitoring alerts and expert support to help recover overdue accounts before they turn into bad debts. A single unpaid invoice can wipe out months of profit — prevention is always cheaper than recovery.

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.