Business news 8 January 2026

UK businesses are facing a tough mix of rising employment costs, weak confidence, uneven consumer demand and mounting insolvency risk. While parts of retail and tech continue to show resilience, construction, hospitality and investment-led sectors remain under pressure. For SMEs trading on credit, the signals are clear: cash flow discipline and early warning systems matter more than ever.

James Salmon, Operations Director.

SME & Economic Confidence

UK entrepreneurs lose faith

Confidence among UK entrepreneurs has slumped, with only 17% now recommending that young people start a business in Britain. Nearly four in five family business owners say they feel pessimistic about the economy, and dissatisfaction with government understanding of SME challenges is widespread. Looming changes to Business Property Relief are adding further strain for owners thinking about succession.
Why it matters: Low confidence often leads to delayed payments, reduced investment and greater credit risk across SME supply chains.

Britain’s most affluent households rein in spending

Higher taxes and sluggish income growth are hitting even the UK’s highest earners, who account for around 40% of discretionary spending. A slowdown in this group’s purchasing power risks rippling through the wider economy and undermining growth plans.
Why it matters: When discretionary spending weakens, suppliers are often the first to feel slower payments and stretched credit terms.

Industry-Specific Pressures

Construction sector endures year-long decline

UK construction output has now fallen for twelve consecutive months, according to S&P Global. Weak confidence, delayed spending decisions and rising costs continue to drag on activity, with housing starts expected to remain below target levels.
Why it matters: Construction downturns historically precede higher insolvencies among subcontractors and materials suppliers.

Rural pubs under siege from business rates

Rural pubs face some of the sharpest business rates increases following revaluations, with average rateable values soaring in parts of the South West. Combined with higher energy bills, National Insurance and falling footfall, closures continue at a steady pace.
Why it matters: Hospitality suppliers often trade on thin margins and extended terms, increasing exposure when venues struggle.

Luton Airport expansion threatened by tax rises

Luton Airport’s £2.5bn expansion plan is under review as rising business rates could more than double its annual tax bill by 2029. Industry leaders warn that higher fixed costs may stall investment and job creation.
Why it matters: Large infrastructure delays can cascade down to contractors and SMEs reliant on long-term credit agreements.

Employment & Labour Market

Workers’ rights reforms still add £1bn in costs

Although the estimated cost of Labour’s Employment Rights Act has been revised down, businesses still face around £1bn a year in extra administrative burden. Employers remain concerned about wider impacts on hiring and flexibility as unemployment ticks higher.
Why it matters: Rising employment costs squeeze cash flow and increase the likelihood of slower invoice settlement.

UK firms turn to overseas workers

Higher National Insurance costs are pushing some UK firms to hire overseas for back-office roles, while youth unemployment has climbed to 15%, the highest in the G7.
Why it matters: Structural labour changes can signal longer-term pressure on domestic demand and payment reliability.

Gen Z saves more as insecurity grows

Young adults are saving at their highest rate in years, reflecting economic uncertainty and weaker job prospects. Household saving overall has risen, weighing on consumption.
Why it matters: Higher saving rates often translate into softer sales and longer debtor days for SMEs.

Retail, Consumer & Services

Festive grocery sales bring short-term relief

UK grocery sales rose 3.8% over Christmas as shoppers favoured own-brand and value options. Discounters and online retailers performed strongly, though food inflation pressures remain.
Why it matters: Volume resilience helps suppliers, but margin pressure can still lead to slower payments.

Mixed retail trading updates

  • Tesco expects profits at the upper end of guidance after strong Christmas sales.
  • Marks & Spencer saw robust food sales but weaker Fashion, Home & Beauty demand.
  • Primark reported a challenging start to the year, particularly in Europe.
  • Greggs delivered steady growth but warned conditions remain tough.
    Why it matters: Retail remains uneven, increasing credit risk for suppliers exposed to discretionary categories.

Housing & Property

UK house prices fall unexpectedly

House prices slipped 0.6% in December, with annual growth slowing to just 0.3%. The average UK home price is now at its lowest since June.
Why it matters: Weak housing activity affects construction, furnishings and trade suppliers reliant on credit sales.

Trade, Regulation & Global Signals

UK–Switzerland financial services deal takes effect

A new agreement between the UK and Switzerland allows firms to rely on each other’s regulatory frameworks, cutting costs and boosting cooperation.
Why it matters: Greater regulatory certainty supports exporters and cross-border trade on credit.

UK trade growth lags global pace

UK trade is forecast to grow slightly slower than the global average amid protectionism and geopolitical tensions. Closer relationships with trusted trading partners could help close the gap.
Why it matters: Trade friction increases payment risk for exporters and importers alike.

US defence spending surge signals geopolitical risk

The US plans to lift defence spending sharply by 2027, highlighting growing global uncertainty.
Why it matters: Heightened geopolitical risk often feeds through to volatile markets and cautious credit behaviour.

Samsung profits surge on AI demand

Samsung expects profits to triple year-on-year as AI-driven chip demand accelerates.
Why it matters: Global tech strength supports growth, but contrasts sharply with pressures facing traditional UK sectors.

Market Snapshot

  • FTSE 100: Just above 10,000 after easing back as oil and metal prices fell.
  • US markets: S&P 500 and Nasdaq near record highs, driven by tech optimism.
  • Oil: Prices fell sharply after US policy moves on Venezuelan supply.
  • Gold: Weakened after recent highs as traders took profits.
  • Pound: Sterling has weakened against both the dollar and the euro, adding cost pressure for importers.

Global markets remain supported by optimism around technology and AI, but beneath the surface there are growing signs of strain from weaker commodity prices, currency moves and uneven economic momentum.

UK markets

The FTSE 100 has slipped back after a strong start to the year, falling below recent highs and hovering just above the 10,000 level. The pullback has been driven largely by falling oil and metal prices, which have weighed heavily on energy and mining stocks. BP and Shell have both come under pressure, reflecting lower crude prices and uncertainty around global supply following recent US policy announcements.

For UK businesses, this matters because weakness in heavyweight sectors like energy and materials tends to drag on overall sentiment, even if other parts of the economy are holding up.

European markets

European shares have been more resilient. The Euro Stoxx 50 remains close to record levels, supported by expectations that interest rates may eventually ease and that inflation pressures are gradually moderating. However, energy stocks have also weakened across the continent, and investors remain cautious ahead of key US economic data.

While Europe is holding up better than the UK in equity terms, the outlook is still fragile, particularly for export-driven industries and manufacturers facing weak global demand.

US markets

US markets continue to outperform. The S&P 500 and NASDAQ are hovering near record highs, driven primarily by technology stocks and enthusiasm around artificial intelligence. Announcements at CES and strong demand for AI-related hardware and software have boosted confidence, with companies like Nvidia continuing to influence broader market direction.

This strength is positive for global sentiment, but it also highlights the growing divide between tech-led growth and more traditional sectors such as retail, construction and manufacturing, which remain under pressure.

Commodities

Oil prices have fallen sharply, following announcements that large volumes of Venezuelan oil could return to global markets. Brent crude is trading around the low $60s per barrel, while US crude is lower still. This has helped ease fuel cost pressures but has hit energy producers and related investment.

Gold prices have softened after reaching recent highs, as traders took profits ahead of portfolio rebalancing. While still elevated, the pullback suggests investors are becoming slightly less defensive — though uncertainty remains high.

Currency markets

The pound has weakened against both the US dollar and the euro. Sterling is now trading around the mid-$1.34 range against the dollar and just above €1.15 against the euro. A weaker pound raises import costs for UK businesses and can add pressure to margins, particularly for firms reliant on overseas suppliers.

At the same time, exporters may see some benefit — but only if overseas demand holds up and customers remain able to pay on time.

Insolvencies – Latest Notices

Appointments of Administrators

  • BATT CABLES LIMITED
  • CRICKET BIDCO LIMITED
  • LANTEGLOS HOTEL AND VILLAS LIMITED
  • P & B METAL COMPONENTS LIMITED
  • STONES DISTRIBUTION LTD

Appointments of Liquidators

  • BLACKACRE HOLDCO LIMITED
  • CLK ASSOCIATES (YORKSHIRE) LTD
  • GKM MANAGEMENT LIMITED
  • G.M. ASSOCIATE SERVICES (UK) LIMITED
  • HOLYWELL BURMESE LIMITED
  • INVESTCLOUD PB UK LTD
  • MACHINE ALCHEMY LIMITED
  • NHKL 156 LTD
  • PREMIER PROPERTIES (1942) LIMITED
  • PYRRHUS LIMITED

Petitions to Wind Up

  • CARRINGTON’S ROOFING LTD
  • EARLE GROUP LIMITED
  • LIVII LTD
  • SALUS PROPERTIES LIMITED

CPA Call to Action

Late payments and rising insolvencies are often the first visible signs of financial stress. CPA members use CreditCare reports, continuous monitoring, and our Overdue Account Recovery service to spot risk early and recover cash without damaging customer relationships.

If you sell on credit, now is the time to tighten control — 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.