UK Business News Today: 10 August 2026 | Economy, Markets & Insolvencies

The week begins with some encouraging signals for UK businesses: permanent hiring has stabilised after nearly four years of decline, BDO says business activity returned to growth in July and economists expect GDP to have expanded by around 0.4% in the second quarter. However, the underlying picture remains fragile. Businesses are still contending with high energy and employment costs, uncertainty over the autumn Budget, possible tax changes and geopolitical risks keeping oil prices elevated. For businesses selling on credit, improving activity is welcome, but it remains important to distinguish between customers whose trading is genuinely strengthening and those whose turnover is rising while cashflow remains under pressure.

James Salmon, Operations Director.

Key Developments

• UK permanent hiring stabilised in July after 45 consecutive months of decline.
• Economists expect UK GDP to have grown around 0.4% in the second quarter, although underlying momentum remains uncertain.
• BDO’s business activity index returned to growth, helped by hospitality, retail, warm weather, tourism and the World Cup.
• Government borrowing and tax policy are moving higher up the business agenda ahead of the autumn Budget.
• Global equities remain close to record highs after unexpectedly weak US payrolls reduced expectations of another Federal Reserve rate rise, while continuing tensions around the Strait of Hormuz keep energy costs elevated.

SME & Business Environment

UK business activity returns to growth

UK business activity returned to growth in July, according to BDO, whose output index rose to 95.29 from 93.41 in June. A reading above 95 indicates growth.

Hospitality and retail were important contributors, supported by warm weather, domestic tourism and World Cup activity. Business confidence also improved to 89.96 from 88.45, although the earlier reading had been a five-year low.

Manufacturing confidence weakened as businesses continued to face concerns around input costs and geopolitical uncertainty. BDO warned that without greater certainty over government economic policy, the improvement could prove temporary or seasonal rather than the beginning of a sustained acceleration.

Why it matters: Improving activity can support customer demand and payment performance, but businesses selling on credit should continue checking whether stronger sales are translating into stronger cashflow.

Industry leaders call for action on taxes, energy costs and red tape

Business leaders have criticised the Government’s “buy British” procurement strategy, arguing that taxes, energy bills, business rates and regulation are more immediate concerns.

Manufacturers continue to highlight the gap between UK industrial energy costs and those faced by competitors elsewhere in Europe. Businesses in hospitality are meanwhile concerned that additional tourist taxes could add another layer of cost.

Industry proposals include lower VAT, reform of business rates, lower energy costs, less restrictive agricultural and planning regulations and action to reduce raw-material costs.

Why it matters: Higher operating costs weaken margins and can lengthen payment cycles, particularly where customers cannot easily pass additional costs through to their own clients.

Businesses risk paying higher rates for installing air conditioning

Retailers have warned that stores installing air conditioning during heatwaves can face higher business rates if the improvements increase a property’s rateable value.

British Retail Consortium chief executive Helen Dickinson said the system can effectively punish shops for investing in measures that improve working conditions and help businesses cope with hotter weather.

The issue is becoming more relevant as businesses increasingly consider cooling equipment to protect employees, customers and stock during extended periods of high temperatures.

Employers urged to rethink workplace perks

Research highlighted by the Sunday Times suggests many businesses spend heavily on employee benefits without checking whether staff actually value them.

The CIPD found that 20% of employers are unclear what their benefits are intended to achieve, while only 15% assess whether they are effective.

A survey of 2,000 UK employees found staff generally preferred practical benefits such as sick pay, pay rises that keep pace with inflation, flexible working, pensions and financial support rather than office gimmicks such as beer fridges or sleep pods.

Companies including PwC and the Chartered Management Institute are reportedly reducing some costly perks and placing more emphasis on flexibility, time and financial wellbeing.

Economy & Policy

UK expected to record another quarter of economic growth

Economists expect official figures this week to show that UK GDP grew by around 0.4% between April and June, following growth of 0.6% in the first quarter of 2026.

World Cup activity, warm weather and associated consumer spending are expected to have helped support the headline figure.

The monthly picture may be less positive. Forecasts for June range from a 0.1% contraction to a 0.1% increase, and economists remain cautious about underlying momentum as businesses absorb higher costs and disruption linked to the Middle East conflict.

There is also concern that households and businesses may become more cautious ahead of the autumn Budget.

Treasury concerned fiscal-rule flexibility could unsettle markets

Treasury officials are reportedly concerned that Prime Minister Andy Burnham’s discussion of using greater “flexibility” within the fiscal rules to increase investment could create uncertainty in financial markets.

The flexibility relates to changes made to the rules in 2024 that potentially provide significantly greater borrowing capacity for investment in areas such as housing, transport and defence.

Officials are concerned that if investors believe the framework no longer imposes a sufficiently binding constraint on borrowing, government financing costs could increase.

Chancellor urged to favour spending restraint over borrowing

Commentator Alex Brummer has argued that Chancellor John Healey should reduce spending rather than use additional borrowing to fund government commitments.

The pressures cited include an estimated £15bn shortfall in defence spending, a potential £18.5bn social-care funding gap, and significant proposed investment in housing and infrastructure.

The argument is that using public financial institutions to fund spending would still ultimately amount to additional borrowing and could provoke a negative bond-market reaction.

This is commentary rather than announced government policy, but it reflects the growing debate over fiscal credibility ahead of the Budget.

TUC calls for “root and branch” review of OBR

The TUC is urging Chancellor John Healey to undertake a substantial review of the Office for Budget Responsibility, arguing that its economic models discourage public investment.

The union particularly objects to the assumption that additional public investment can crowd out private-sector capital.

It wants the Government to make greater use of fiscal flexibility through institutions such as the National Wealth Fund and National Housing Bank, while giving investment bodies longer time horizons for projects that may take many years to generate returns.

Thames Water creditors warn nationalisation could cost £140bn

Creditors of Thames Water have told the Government that nationalising England’s water companies could require around £140bn of government debt, approximately £40bn more than previously estimated.

Analysis commissioned by creditors argues that borrowing on this scale could have significant consequences for perceptions of the UK’s fiscal health.

The creditors’ alternative proposal would involve them absorbing billions of pounds of losses and recapitalising Thames Water in return for greater regulatory breathing space over issues including investment requirements and fines.

British Steel owes former owner more than £1bn

British Steel’s 2024 accounts show that the company owes more than £1bn to former owner Jingye Steel, compared with £736m a year earlier.

Jingye has requested compensation for investment losses following the Government’s intervention in the business.

An independent valuer will determine whether compensation is payable and, if so, how much.

Tax & Government

Burnham urged to consider 2% wealth tax

Prime Minister Andy Burnham is facing pressure from Labour allies to introduce an annual wealth tax.

A report from Compass proposes a 2% annual levy on net wealth above £10m, which it estimates could raise around £24bn. The group also proposes aligning capital gains tax with income tax, potentially raising a further £11bn.

A BMG poll cited alongside the proposal found 66% of adults supported a wealth tax on assets above £10m.

Burnham has not ruled out such a tax, although he has said he wants greater fairness without “demonising” wealthy people.

Lord O’Neill reported to have concerns over wealth-tax proposals

The Times reports that Burnham has faced difficulties recruiting former Treasury minister Lord O’Neill of Gatley amid disagreements over possible tax policy.

Lord O’Neill has previously said he is strongly opposed to wealth taxes, arguing that they can be easily structured around, raise less revenue than supporters expect and potentially weaken investment and entrepreneurship.

The debate underlines the tension between raising additional revenue and maintaining business and investor confidence.

Government accelerates crackdown on subscription traps and misleading discounts

The Government intends to bring forward rules making consumer subscriptions easier to cancel.

Businesses will be required to provide clearer information at the beginning of contracts, send reminders and make customers aware when subscriptions automatically renew at higher prices.

The measures are now intended to take effect by January 2027. The Government previously estimated that tackling unwanted subscriptions could save consumers around £400m a year, or up to £170 per affected person.

The Government will also consult this autumn on tighter restrictions around misleading “was” prices, inflated recommended retail prices and other forms of deceptive discounting.

Clacton prepares for unusual by-election

Voters in Clacton go to the polls on Thursday after Nigel Farage resigned his parliamentary seat following an investigation into a reported £5m payment from a cryptocurrency billionaire.

The other major parties are not standing, leaving satirical candidate Count Binface the most visible challenger.

The result is unlikely to have a direct economic impact, but the contest comes as immigration, tax and government policy remain prominent issues in national political debate.

Employment & Labour

UK hiring stabilises after 45-month decline

Permanent hiring at UK businesses stabilised in July, ending a 45-month contraction, according to the Recruitment & Employment Confederation and KPMG.

The permanent placements index returned to the neutral 50-point level, while temporary vacancies increased for the first time in around two years.

Demand for full-time workers continued to fall, but at a slower pace, and wage growth accelerated to a six-month high. Employers were particularly willing to pay more for experienced candidates.

Medical care, engineering and IT recorded stronger vacancy demand, while retail and hospitality remained weaker.

The findings suggest that businesses may be becoming more willing to proceed with hiring and investment after an extended period of political, economic and cost uncertainty.

Immigration enforcement intensifies in delivery and construction

Immigration enforcement activity has increased sharply in sectors associated with higher levels of illegal working.

Visits to the warehouse and delivery sector rose 147% year-on-year in the first half of 2026, with arrests increasing 70%. Compared with the previous two-year period, enforcement visits were reportedly up 325%.

Construction businesses experienced a 150% increase in visits during the first half of this year, while arrests increased 29%.

From October, tougher right-to-work requirements will also extend to companies using gig-economy workers, with businesses becoming responsible for ensuring people working in their name have a legal right to work.

London loses more families and mid-career workers

London’s population reportedly fell last year for only the third time in around four decades, with much of the movement involving people in their 30s and 40s, particularly families.

Housing affordability is central to the trend, but the argument extends beyond headline property prices to the availability, size and quality of housing.

One forecast cited suggests that fewer than 5,000 new London homes could be completed in both 2027 and 2028.

The movement of workers further away from London is changing commuting patterns, increasing pressure on housing in surrounding towns and reinforcing employee demand for hybrid and flexible work.

Retail & Consumer

UK house-price growth slows to 0.1%

UK house prices recorded their weakest annual growth since late 2023 in July, according to Lloyds Bank.

The average property price fell by £143 during the month to £299,253, leaving prices only 0.1% higher than a year earlier.

The North East and North West recorded stronger performance, while London and the South East experienced declines.

Lloyds expects activity and prices to remain broadly stable for the rest of the year, with affordability continuing to be constrained by mortgage rates.

Warm weather continues across the UK

Sunny spells are expected across much of the UK today, with London reaching around 27°C.

The London forecast becomes substantially hotter during the middle of the week, with temperatures around 31°C on Wednesday, potentially 35°C on Thursday and around 32°C on Friday, before easing back towards the mid-20s over the weekend.

For employers, prolonged heat can affect productivity, outdoor work, refrigeration, transport and energy use.

Industry & Investment

Berkshire Hathaway puts more of its cash to work

Berkshire Hathaway’s cash reserves fell from $397.4bn in the first quarter to $365.5bn at the end of Q2 2026.

Operating earnings increased to almost $13bn, up from $11.2bn a year earlier.

Under chief executive Greg Abel, Berkshire has reportedly spent $4.5bn on share buybacks, invested another $10bn in Google and acquired housebuilder Taylor Morrison for $6.8bn.

The figures point to a greater willingness to deploy capital while maintaining a very substantial liquidity buffer.

FTSE 100 chief executive pay reaches record levels

The average FTSE 100 chief executive received more than £5m in total pay last year, according to figures reported by the Mail on Sunday.

AstraZeneca chief executive Pascal Soriot received £17.7m, while executives at several other major businesses could receive packages above £20m if performance targets are met.

Share-based incentives are an important part of the increase, reflecting strong equity-market performance.

For comparison, S&P 500 chief executives reportedly averaged around £12.2m.

China questions employment impact of rapid robot adoption

Around 300,000 industrial robots were installed in China in 2024, representing more than half of the global total installed that year.

China is now reportedly becoming more concerned about the possibility that rapid automation could displace workers.

The debate illustrates a challenge facing industrial economies: automation can increase productivity and reduce some labour costs, but can also create disruption if employment opportunities do not adjust quickly enough.

OpenAI pauses some Astra activity over cyber capabilities

OpenAI said it had paused some internal activity involving its unreleased Astra model after the system reached its “Critical” cyber capability threshold.

That threshold includes the ability to identify and develop serious zero-day vulnerabilities without human intervention, or devise new strategies for advanced cyber-attacks.

OpenAI said Astra was not involved in the recent hacking of AI platform Hugging Face.

International & Trade

US jobs fall unexpectedly, changing interest-rate expectations

US nonfarm payrolls fell by 23,000 in July, compared with expectations for an increase of 83,000, while May and June were revised down by a combined 103,000 jobs.

The labour force participation rate fell to 61.4%, while unemployment was reported at 4.1%.

Rather than falling on the weak economic data, US equities rose because investors interpreted the figures as reducing the likelihood of another Federal Reserve interest-rate increase in September.

The S&P 500 subsequently closed at a record high.

Burnham calls for Britain to host another men’s World Cup

Prime Minister Andy Burnham has criticised the fact that Britain has hosted only one men’s football World Cup, in 1966.

Burnham referred to England’s unsuccessful bid to host the 2018 tournament and questioned the fairness of previous FIFA decision-making.

He has also repeated his call for FIFA president Gianni Infantino to resign following controversy around proposals to sell stakes in the World Cup to private investors.

The UK and Ireland will host matches at Euro 2028, while the UK is due to host the Women’s World Cup in 2035.

For businesses, major sporting tournaments can create meaningful short-term effects for hospitality, tourism, retail, advertising and local infrastructure.

Global Market Summary

Global equities begin the week close to record levels after Friday’s unexpectedly weak US employment report dramatically changed expectations about the next Federal Reserve decision.

US payrolls contracted by 23,000 in July, compared with forecasts for an 83,000 increase, while the previous two months were revised down by a combined 103,000. Investors interpreted the figures as making another near-term US rate rise less likely.

UK and European markets

The FTSE 100 finished Friday up 0.31% at 10,901.09, its third-highest closing level on record and its fourth consecutive weekly gain. By 09:54 BST on Monday it was trading around 10,875, down approximately 0.24% as investors balanced improved global interest-rate expectations against continuing geopolitical and energy risks.

The STOXX Europe 600 ended Friday at a record 660.25, up 0.31%, and was broadly flat around 660.19 on Monday morning.

The Euro STOXX 50 rose 0.33% on Friday to 6,523.86, before adding another 0.15% to around 6,533.53 on Monday.

Germany’s DAX gained 0.69% on Friday to 26,319.45 and was another 0.19% higher at 26,368.76 on Monday morning.

France’s CAC 40 finished Friday 0.17% higher at 8,714.93, before slipping 0.14% to around 8,702.73 on Monday.

Strong corporate earnings supported European shares last week, while precious-metal miners benefited from the surge in gold.

United States

The S&P 500 rose 0.62% to a record 7,757.64 on Friday and gained 3.59% across the week, its strongest weekly performance since April.

The Dow Jones Industrial Average added 0.28% to 54,036.93.

The Nasdaq-100 gained 1.19% to 29,722.30, with growth and technology shares benefiting particularly strongly from the reduction in US rate-rise expectations.

By Monday morning, S&P 500 futures were another 0.43% higher at 7,791.25, while Nasdaq-100 futures were 0.78% higher at 29,954.50.

Asia

Asian markets broadly followed Wall Street higher.

Japan’s Nikkei 225 rose 2.08% to 66,970.22, making it one of the strongest major markets at the beginning of August.

Hong Kong’s Hang Seng gained 1.05% to 25,937.49, helped by technology and property shares.

The Shanghai Composite also advanced 0.67%, while South Korea’s KOSPI gained 0.65%.

Market drivers

The biggest positive driver remains the dramatic weakening in the US employment report because it reduced expectations that the Federal Reserve will raise rates again in September.

The principal counterweight is the continuing dispute over the Strait of Hormuz.

Iran has demanded that the US end its naval blockade, lift sanctions and provide compensation before the strait fully reopens. Tehran has also ruled out direct talks with Washington.

A missile reportedly targeted an Adnoc vessel over the weekend, while Houthi militants claimed an attack on Saudi Aramco’s Jazan refinery. These developments have maintained a significant geopolitical premium in global energy prices.

The next major test for markets will be US July CPI on Wednesday, where the supplied market consensus is for headline inflation of 3.4% year-on-year. A lower reading would reinforce expectations of unchanged US rates; a stronger number could reopen the debate about further tightening.

The Bank of Japan is moving in the opposite direction. Its July meeting summary indicated that at least one policymaker believes Japanese rates may need to rise faster than markets expect.

Currencies

Sterling is modestly stronger.

GBP/USD stood at approximately $1.3502 on Monday morning, up around 0.51% over the week, helped by the weaker US dollar following the payroll report.

GBP/EUR was around €1.1679, leaving sterling approximately 0.06% firmer against the euro.

The Japanese yen remains weak despite the Bank of Japan’s increasingly hawkish language. USD/JPY moved above 158.6, reversing the improvement seen after earlier intervention.

Commodities

Brent crude: $84.51 a barrel, up around 1.15% from Friday’s close of $83.55.

WTI crude: $79.02 a barrel, up around 1.07%.

Oil has gained more than 5% over several sessions as uncertainty around Hormuz continues.

Gold: approximately $4,346 an ounce, after gaining more than 7% last week. Gold jumped sharply following the US employment report as lower interest-rate expectations combined with continuing geopolitical demand for safe-haven assets.

European natural gas also moved sharply higher on Monday, with futures rising as much as 3.2% after weekend negotiations failed to produce an immediate Hormuz reopening.

For UK business owners, the central market message is mixed. Lower expectations for US interest rates are positive for financial conditions and sentiment, but energy prices remain a potential source of inflation and cost pressure.

Insolvency Watch

Administrations (1)

• AVTAR CONSTRUCTION LIMITED

Liquidations (8)

• CRIMSONLAND (UK) LTD
• CUSTOMER FIT LIMITED
• DANAJO & COMPANY LIMITED
• HALLROYD HOMES LIMITED
• MACINTYRE MEDIA LIMITED
• OLD HOUSE PROPERTIES LIMITED
• SHAPE-UP SERVICES LIMITED
• STRATEGIC CAPITAL MANAGEMENT LIMITED

Winding-up Petitions (5)

• BE PORTABLE LTD
• ENTERTAINMENTS INTERNATIONAL LIMITED
• FLEXIHEATING & BATHROOMS LTD
• HEATONS CHICKEN LIMITED
• HU2 HOLDINGS LIMITED

Stronger trading conditions still demand disciplined credit control

There are genuine reasons for cautious optimism today. Hiring is stabilising, business activity has returned to growth and the economy is expected to have expanded for a second consecutive quarter.

But a stronger economy does not automatically mean every customer becomes a stronger credit risk.

Some businesses are still dealing with higher wages, elevated energy costs, expensive borrowing, tax uncertainty and stretched working capital. A customer can be growing its turnover while simultaneously taking longer to pay suppliers.

That is why improving conditions can be an important time to strengthen credit control rather than relax it.

CPA can help businesses protect cashflow through CreditCare credit reports, debtor monitoring and structured credit-control support. Where an account becomes overdue, CPA can also help recover payment professionally and considerately, with the objective of getting Members paid while preserving valuable customer relationships.

Early action matters. The longer an invoice remains unpaid, the greater the risk that a manageable delay becomes a more serious credit problem.

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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