UK Business News Today: 1 September 2026 | Economy, Markets & Insolvencies
September begins with a stark reminder of the pressure on UK small-business cashflow. Enterprise Nation’s Small Business Barometer says 42% of small firms experienced late payment during the past year. With £26bn remains tied up in overdue invoices at any given time. At the same time, petrol and diesel prices are climbing, shop price inflation has reached a two-year high, government borrowing costs are at their highest in decades and businesses face uncertainty over taxation ahead of the 28 October Budget.
James Salmon, Operations Director.
Key Developments
- £26bn is tied up in overdue invoices, while 42% of small businesses report experiencing late payment.
- Three-quarters of small-business owners pay themselves under £20,000, highlighting how owners are absorbing financial pressure personally.
- Petrol has risen to 161.6p per litre and diesel to 183.4p, adding another cost burden for transport-dependent businesses.
- UK shop price inflation reached 1.5% in August, its highest level for two years.
- Global bond and energy markets are under renewed pressure, with Brent above $92 and UK gilt yields rising sharply.
SME & Business Environment
£26bn trapped in overdue invoices as late payment spreads
Late payment is becoming substantially more widespread across the UK small-business community. Enterprise Nation’s Q2 Small Business Barometer says 42% of small firms have been paid late during the past 12 months, compared with a range of 24% to 34% through 2023 and 2024. Among businesses employing staff, the incidence of late payment has more than doubled since summer 2024.
The report also cites Small Business Commissioner figures showing that approximately £26bn is tied up in overdue invoices at any one time. Encouragingly, the proportion of invoices arriving late for each affected business appears to have eased, but significantly more firms are now encountering the problem.
The wider Barometer makes the cashflow picture even more concerning. 76% of owners now pay themselves less than £20,000 a year, rising to 65% among owners employing staff. Only 41% expect their business to expand during the next year, while the proportion intending to seek external funding has fallen to a record low of 40%.
Why it matters: For businesses selling on credit, £26bn of delayed payments represents working capital sitting in customers’ bank accounts rather than funding wages, suppliers, tax bills and growth.
Expansion confidence weakens and funding appetite hits record low
Enterprise Nation found expansion confidence has fallen from 50% last year to 41%, close to the weakest reading recorded by its Barometer. Funding appetite has fallen even more sharply, with only 40% planning to seek outside finance compared with a peak of 63% in autumn 2023.
Businesses that do want funding are increasingly looking for smaller sums: 40% now want less than £10,000. Credit-card use as a funding source has also almost doubled from 4.5% to 8.7%.
Planning shortages threaten housing ambitions
Council planning departments are estimated to be short of around 2,660 planning officers, according to the Home Builders Federation and Paragon Bank, up from 2,200 last year. Only around 20% of major planning applications are currently processed within the target 13 weeks.
Delays and inconsistent decision-making risk slowing housebuilding even where demand and funding are available.
UK house prices edge higher
Nationwide says the average UK house price rose 0.2% in August to £275,465. House-price growth remains below earnings growth, which is gradually improving affordability, although higher mortgage rates are offsetting some of the benefit.
The housing market appears to be remaining relatively resilient despite wider geopolitical and economic uncertainty.
Water shortages deepen across England
England is experiencing a severe “flash drought”, with rivers depleted and water supplies under increasing pressure after sustained heat. Around 30 million people face hosepipe restrictions, while some suppliers are trucking in water and considering tougher measures.
Southern Water is seeking additional restrictions and permission to continue taking water from the environmentally sensitive River Test.
Economy & Policy
Government borrowing costs reach 30-year high
Average yields on UK government debt have reached around 3.8% this year, their highest in nearly three decades. Persistent inflation, higher energy prices and concerns about government borrowing have driven investors to demand greater returns.
The Office for Budget Responsibility expects annual debt-interest spending to exceed £100bn.
Bailey sees AI and robotics as key to stronger UK growth
Bank of England Governor Andrew Bailey says artificial intelligence and robotics will be important to accelerating productivity and economic growth. Bailey also said second-round inflation effects remain relatively subdued, with wage demands and shop-price pressures yet to become entrenched.
Nevertheless, he stressed the importance of bringing inflation back to the Bank’s 2% target after CPI reached 2.9% in July.
Bailey warns advanced AI could threaten financial stability
In a letter to G20 finance ministers and central bankers, Andrew Bailey also warned that advanced “frontier” AI systems could create financial-stability risks through sophisticated autonomous cyber-attacks.
Bailey said many countries lack adequate protocols for managing such technologies and called for greater international coordination.
Burnham faces defining autumn as Parliament returns
Prime Minister Andy Burnham returns to Parliament facing a crowded agenda including relations with US President Donald Trump, the 28 October Budget, possible tax rises and divisions over energy policy.
Burnham is expected to argue that bringing more essential services under public control can support economic growth.
Defence spending target reportedly shelved
Chancellor John Healey is reportedly preparing to abandon the previous ambition of raising UK defence spending to 3% of GDP by 2030, instead focusing resources on an underfunded Defence Investment Plan.
Separately, reports suggest the US is pressing Britain to increase defence expenditure and has raised its position on the Falkland Islands as leverage.
Tax & Government
£100,000 tax cliff edge could affect 2.5m workers
Analysis from IG suggests more than 2.5 million workers could be caught by the £100,000 income-tax cliff edge over the next four years as frozen thresholds drag more earners into the regime.
The number affected has already reached around two million, while the additional tax revenue generated by frozen thresholds is estimated to reach £7bn annually by 2031.
Lord O’Neill warns against further tax rises
Lord O’Neill of Gatley has warned the Government against increasing taxes on wealth or capital gains, arguing that higher rates could discourage entrepreneurs from selling businesses or encourage capital to move abroad.
His intervention comes as speculation increases about possible tax measures in the October Budget.
Richard Walker calls for lower business taxes
Richard Walker, formerly Sir Keir Starmer’s Cost of Living Czar, has urged Andy Burnham to reduce the cost of employing people.
Walker highlighted National Insurance and business rates as barriers to hiring and investment and also called for welfare reform designed to support more people back into employment.
Ministers consider exit tax on publicly supported businesses
The Government is examining a possible tax on companies that relocate abroad after receiving UK taxpayer funding.
The proposal is aimed particularly at university spin-outs and start-ups whose intellectual property has been developed with public support. A levy could potentially be based on company valuation when a business is sold or floated overseas.
Scottish businesses oppose proposed food price cap
Twenty-three organisations representing retail, manufacturing, food production and distribution have urged Scotland’s Government to abandon plans for a statutory food price cap.
The groups argue that intervention could distort supply chains and ultimately increase rather than reduce prices.
Energy & Costs
Petrol and diesel prices surge
Average UK petrol prices have reached 161.6p per litre, the highest level since November 2022, according to the AA. Diesel has climbed to 183.4p per litre.
The AA argues that pump prices appear excessively high given wholesale petrol remains around 68.5p per litre. The increases follow criticism from the Competition and Markets Authority over competition within fuel retailing.
Goldman Sachs warns diesel pressures could intensify
Goldman Sachs has more than doubled its forecast for diesel refining margins.
It expects diesel to trade at a premium to Brent crude of around $49 a barrel in Europe by the end of next year, up from a previous forecast of $19. Continuing disruption from the Russia-Ukraine and Iran conflicts could push prices higher still.
Shop price inflation reaches two-year high
British Retail Consortium figures show shop-price inflation accelerated from 0.9% in July to 1.5% in August, its highest rate for two years.
Food inflation increased from 2.2% to 2.8%, while non-food inflation reached 0.9%. Higher energy, commodity and other input costs are increasingly working their way through supply chains.
Foreign investment in UK energy falls to 12-year low
EY says Britain attracted only 27 foreign-funded energy projects last year, the lowest number for 12 years.
Oil and gas projects dropped from 16 to just three, while investors identified high UK energy costs as a major concern.
Government shelves two green levies
The Government has delayed plans to extend the UK Emissions Trading Scheme to waste incineration and abandoned proposed carbon charges on British ports.
Officials cited uncertainty for local authorities and industry, while concerns had also emerged that ferry and cruise operators could move activity elsewhere.
Employment & Labour
Beefeater prepares to close all UK restaurants
Whitbread plans to close all 106 Beefeater restaurants by 10 September as it withdraws from the branded restaurant market and concentrates on Premier Inn.
Some sites will be converted into around 600 additional hotel rooms while others may be sold as going concerns. Approximately 3,800 roles could be affected, although Whitbread hopes to redeploy many employees.
Gen Z sick-leave survey highlights workplace challenge
Research by Merlin Strategy for the Centre for Social Justice found more than 80% of under-25 respondents admitted taking sick leave when not genuinely unwell, compared with 43% of those aged between 55 and 64.
The findings have been linked to stress, uncertainty and a so-called “quarter-life crisis” among younger workers.
Children’s Commissioner proposes 12 weeks’ paid parental leave
Dame Rachel de Souza wants parents of seriously ill children to receive 12 weeks of leave at 90% of salary, together with a guaranteed right to return to work.
She has also proposed doubling unpaid carer’s leave from five to 10 days.
Industry & Investment
UK digital infrastructure investment reaches £11.2bn
Investment in UK digital infrastructure reached £11.2bn in 2025, almost double the £5.8bn recorded a decade earlier.
The ONS has revised its methodology to better capture investment in data centres, which have become increasingly important to AI deployment. It estimates 35% of UK businesses use AI, rising to 58% within information and communications.
National Wealth Fund backs battery technology
The National Wealth Fund has invested £53m in Nexeon as part of a £100m funding round.
Nexeon develops silicon-based materials intended to improve lithium-ion battery performance. The funding will support a pilot manufacturing facility in Britain.
Pension funds urged to invest more in UK companies
Quoted Companies Alliance chief James Ashton has urged UK pension schemes to channel more capital into British businesses.
Ashton argues that domestic investment, particularly in smaller listed businesses, helps anchor jobs and economic activity in the UK. He has suggested conditional tax incentives could encourage pension funds to invest locally.
Apple begins new era under John Ternus
John Ternus takes over from Tim Cook after Cook’s 15 years as Apple chief executive.
Ternus has spent much of his career at Apple and has overseen the iPhone since 2020. His first major test comes with the company’s latest product launch on 9 September.
Amazon faces US advertising antitrust lawsuit
The US Federal Trade Commission and 22 states have sued Amazon, alleging that the company systematically overcharged advertisers promoting goods through its marketplace and manipulated minimum advertising prices.
Amazon denies wrongdoing.
International & Trade
Logistics UK estimates Brexit export cost at £11.7bn a year
Logistics UK estimates Britain is losing £11.7bn annually in exports as a result of post-Brexit trading arrangements.
Its research says paperwork and border complexity remain significant difficulties for businesses, while separate European Movement UK research found 72.8% of respondents believed Brexit was negatively affecting their operations.
Global Market Summary
Financial markets began September under renewed pressure as rising energy prices, higher government bond yields and hawkish central-bank signals unsettled investors. The resumption of US-Iran hostilities pushed oil sharply higher, increasing expectations that inflation could remain elevated and interest rates higher for longer.
UK and Europe
The UK market reopened following Monday’s bank holiday and immediately caught up with the previous session’s global sell-off.
- FTSE 100: 10,689.84, down 1.24% from Friday.
- STOXX Europe 600: 645.90, down 1.41%.
- STOXX Europe 50: 6,367.75, down 1.82%.
- DAX: 25,974.25, down 2.24%.
- CAC 40: 8,301.14, down 1.19%.
The FTSE’s fall reflected both Tuesday’s risk-off mood and the need to catch up with global markets after the bank holiday. UK government debt also came under pressure, with the 10-year gilt yield jumping around nine basis points at the open to 5.23%, its highest since 2008.
United States
Friday’s Wall Street session ended modestly lower following Federal Reserve Chair Kevin Warsh’s hawkish Jackson Hole comments. Markets fell further yesterday. Futures point lower today, with S&P 500 and Nasdaq futures suggesting further weakness.
Asia
- Nikkei 225: 66,215.34, down 0.29% from Friday.
- Hang Seng: 25,329.73, down 1.00%.
Japan was pressured by rising bond yields, while Hong Kong fell amid weakness in major commerce and property shares. Taiwan bucked the trend after Nvidia announced a $3.5bn investment in MediaTek.
Market drivers
The dominant market issue is again energy-driven inflation. US-Iran hostilities resumed over the weekend, helping push Brent above $92 and WTI close to $88. At the same time, central banks remain concerned about inflation: the Federal Reserve, ECB and Bank of Japan are all confronting renewed pressure to keep monetary policy restrictive.
Bond markets have responded sharply. The US 10-year Treasury reached around 4.79%, Japan’s 10-year government bond touched 3% for the first time since 1996, and UK gilts reached their weakest levels in many years.
For businesses, higher bond yields matter because they can eventually translate into more expensive mortgages, corporate lending and working-capital finance.
Currencies
Sterling remained broadly stable.
- GBP/USD: 1.3540, virtually unchanged from Friday.
- GBP/EUR: 1.1679, around 0.04% lower than Friday.
Sterling is being pulled between relatively firm UK data and concerns that higher energy prices will prolong inflation and keep borrowing costs elevated.
Commodities
- Brent crude: $92.30 a barrel, up 3.3% since Friday.
- WTI crude: $87.80, up 5.3%.
- Gold: $4,370.89 an ounce, down 1.9%.
Oil has risen sharply because of renewed disruption risks around the Strait of Hormuz. Gold, normally considered a safe haven, has fallen as rising real interest rates increase the relative attraction of interest-bearing assets.
Why markets matter to SMEs: Higher energy prices and borrowing costs can hit businesses twice — first through their own overheads and then through customers taking longer to pay as their finances come under pressure.
Insolvency Watch
Administrations (5)
- AIRBAND COMMUNITY INTERNET LIMITED
- CT4N LTD
- GREENSTONE DATA SOLUTIONS LIMITED
- HARLEQUIN SCAFFOLDING SOLUTIONS LTD
- SMARTFRAME TECHNOLOGIES LIMITED
Liquidations (21)
- AGILE RECRUITMENT LTD.
- AURACLE ADVISORY LIMITED
- BRANTS BRIDGE 2022-1 PLC
- BRYAN BISHOP AND PARTNERS LIMITED
- COMDEL LIMITED
- COUSIN’S OAK LIMITED
- DANIEL A WRIGHT LTD
- DAZN GROUP LIMITED
- ELBAR SERVICES LIMITED
- ENGINEERING INSIGHT LTD
- GALLATIN LIMITED
- HEIMSTADEN GROUP U.K. LTD
- HOLLYPARK PRODUCTIONS LIMITED
- HORSELL ESTATES LTD
- LAYLA LTD
- OVDEN LIMITED
- SKIRTON TECHNOLOGY SOLUTIONS LIMITED
- SOUTH WEST ENVIRONMENTAL PARKS LIMITED
- SOUTH WEST ZOO ENTERPRISES LIMITED
- TANDEM PERSONAL LOANS LIMITED
- THE MEDICAL SCREENING COMPANY LIMITED
Winding-up Petitions (1)
When £26bn is overdue, stronger credit control matters
Today’s Enterprise Nation figures demonstrate why late payment should not be treated as a routine inconvenience. When 42% of small businesses encounter overdue invoices, the risk increasingly sits across the whole supply chain.
Good credit control is essential once an invoice becomes overdue, consistent and timely follow-up matters: the longer an account remains unpaid, the greater the risk that payment becomes difficult or impossible. CPA’s Ocerdue Account Recovery Service can take the hassle out of your hands,
CPA helps Members improve payment performance, reduce internal credit-control workload and recover overdue accounts through an ethical and considerate approach designed to preserve valuable customer relationships.
Call CPA on 020 8846 0000 during business hours, Monday to Friday, 9am to 5pm.
Email PaidQuick@cpa.co.uk
Visit https://cpa.co.uk/contact-us/
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.
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