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

UK businesses end the week facing a challenging mix of weaker confidence, growing tax uncertainty and renewed geopolitical tension. Business optimism has fallen to an 18-month low as firms contend with rising employment costs, subdued customer demand and the prospect of further tax reform under the UK’s expected new Prime Minister. Meanwhile, HMRC is stepping up tax enforcement while some investigations are taking years to resolve, and Bank of England policymakers are warning that interest rates may yet need to rise. Against this backdrop, conflict in the Middle East continues to influence global markets and energy prices, reinforcing the importance of strong cashflow management, careful credit control and close monitoring of customer payment behaviour.

James Salmon, Operations Director.

Key Developments

• Business confidence has fallen to an 18-month low, with firms citing rising labour costs, tax uncertainty and weak demand.
• HMRC is intensifying enforcement while businesses continue to face lengthy tax investigations, with some cases taking up to eight years to conclude.
• Bank of England chief economist Huw Pill has warned that UK interest rates may need to rise further if inflation remains above target.
• Andy Burnham is expected to become Prime Minister later this month, with proposed tax reforms already generating debate over property and business taxation.
• Markets remain focused on the conflict between the US and Iran, although investors have regained some confidence as fears of wider disruption to global energy supplies eased.

Economy & Business Environment

Business confidence falls to an 18-month low

Business confidence has fallen to its weakest level in 18 months, according to S&P Global, with only 26% of companies expecting activity to improve over the coming year. Businesses cited rising employment costs, weak consumer demand and uncertainty surrounding future Government tax policy as the main reasons for declining optimism. Confidence within the services sector deteriorated particularly sharply, with many firms delaying investment and recruitment decisions.

Interest rates could still rise, warns Bank of England

Bank of England Chief Economist Huw Pill has warned that interest rates may need to increase again this year if inflation proves more persistent than expected. UK inflation currently stands at 2.8%, above the Bank’s 2% target, while Mr Pill believes the economy may still be operating beyond its productive capacity. He was one of two Monetary Policy Committee members who voted to increase rates at the Bank’s last meeting.

Pension funds urged to back UK businesses

Business Secretary Peter Kyle has urged UK pension funds to invest more of their assets into British companies, warning that legislation could follow if voluntary commitments fail to deliver. Mr Kyle argued that stronger domestic investment is needed to support economic growth, innovation and regional development beyond London and the South East.

Tax & Government

Andy Burnham set to become Prime Minister

Andy Burnham is expected to become the UK’s next Prime Minister after securing nominations from more than 320 Labour MPs, with no rival candidate expected to enter the leadership contest. He is anticipated to become Labour leader next week before formally becoming Prime Minister on 20 July.

With a new administration expected within days, businesses will be watching closely for announcements on taxation, employment policy, industrial strategy and economic growth.

Economists propose sweeping tax reforms

A group of leading economists, including Lord O’Neill, has called for the replacement of six major UK taxes with a single “National Contributions” levy applying to all income. The proposals could generate an estimated £75bn annually while also replacing both council tax and stamp duty with a property-based levy.

Although these remain proposals rather than Government policy, they have intensified debate around the future direction of UK taxation ahead of the expected change in Prime Minister.

Property taxes remain under scrutiny

Further analysis of potential reforms suggests an annual property levy of around 0.48% could replace both council tax and stamp duty. Reports also indicate that the existing High Value Council Tax Surcharge could be extended to homes valued above £1.5 million rather than the current £2 million threshold.

HMRC investigations taking increasingly longer

The Public Accounts Committee has criticised HMRC after revealing that some large business tax investigations are now taking more than eight years to conclude. Even cases that avoid litigation are averaging around 17 months before being resolved. MPs described the delays as “far too long”, although HMRC said its compliance work generated an additional £14.9bn in tax receipts last year.

HMRC increases tax enforcement activity

HMRC’s Fraud Investigation Service secured 260 criminal convictions during the 2025/26 tax year after launching 494 serious tax investigations. The department also recovered £2.1bn through its enforcement work, representing a 39% increase on the previous year. Additional powers allowing HMRC to recover smaller debts directly from bank accounts are also expected to strengthen its enforcement capabilities.

Making Tax Digital registrations remain behind schedule

New figures suggest only around 400,000 sole traders have registered for Making Tax Digital since the current financial year began, well below the 864,000 expected before the 7 August deadline. Tax advisers continue encouraging eligible businesses to prepare early to avoid last-minute disruption.

Corporate & Industry News

Apollo makes £5.7bn approach for EasyJet

EasyJet has received a takeover proposal from Apollo valuing the airline at approximately £5.7bn, equivalent to 715p per share. The airline said the proposal represents an improvement on an earlier approach from Castlelake and indicated it would be minded to recommend the offer should a formal bid be submitted.

Volkswagen cuts model range to reduce costs

Volkswagen has approved plans to halve the number of vehicle models it produces as the manufacturer attempts to improve efficiency and compete with lower-cost Chinese rivals. While management failed to secure approval for deeper restructuring, the company remains committed to reducing its workforce by 35,000 positions before 2030.

Meta expands its artificial intelligence strategy

Meta has unveiled Muse Spark 1.1, describing it as a significant upgrade to its previous AI model, while also launching its first AI image generation platform. Chief Executive Mark Zuckerberg said the latest model delivers stronger coding performance and competes favourably with rival AI systems.

Retail, Tourism & Consumers

Music tourism delivers record £11.2bn boost

UK music tourism generated a record £11.2bn during the past year as major concerts attracted almost 25 million visitors. Domestic audiences accounted for the majority of attendance while overseas visitors increased by 27%, highlighting the growing economic value of large-scale entertainment events.

Consumers warned over misleading cooling products

The Advertising Standards Authority has warned consumers about misleading online advertisements promoting portable air conditioners during the current heatwave. Several products claimed to cool rooms within 90 seconds despite independent testing showing some devices were little more than small desktop fans.

International & Trade

Middle East tensions continue to influence markets

Military exchanges between the United States and Iran continued despite diplomatic contacts aimed at reducing hostilities. Shipping through the Strait of Hormuz remains heavily disrupted while Israel has indicated it is prepared to resume military action if required. Although oil prices have eased from their recent highs, businesses continue monitoring energy costs and supply chain risks closely.

Climate science plays growing role in business risk

Scientists say advances in climate attribution modelling are helping insurers better understand the impact of climate change on extreme weather events. Improved forecasting is already influencing insurance pricing and long-term risk assessment, while some experts believe the research could eventually play a greater role in climate-related legal claims.

Weekend Round-up

France reach the World Cup semi-finals

France became the first nation to book their place in the World Cup semi-finals after defeating Morocco 2-0. Attention now turns to Spain versus Belgium this evening before England face Norway in Saturday night’s quarter-final, with Argentina meeting Switzerland early on Sunday.

Heatwave set to continue

The UK is expected to experience another very warm weekend, with temperatures reaching between 30°C and 33°C across parts of England and Wales. Businesses are being encouraged to prepare for challenging working conditions, while employers should remain aware of increased risks from dehydration, heat stress and disruption to outdoor operations.

Global Market Summary

Global markets ended the week in a more settled mood after investors regained confidence that the latest escalation between the United States and Iran would remain contained. Although military strikes continued and shipping through the Strait of Hormuz remained heavily disrupted, oil prices retreated from Wednesday’s sharp spike, easing immediate concerns over inflation and energy costs. Investors also took encouragement from continued strength in artificial intelligence investment, while attention is now turning towards next week’s US bank earnings season.

European markets traded cautiously on Friday after recovering strongly during Thursday’s session. The FTSE 100 was broadly unchanged at 10,471.41 (-0.01%), while the STOXX Europe 50 slipped 0.25% to 6,268.27. Germany’s DAX eased 0.17% to 25,075.88, while France’s CAC 40 was little changed, edging 0.02% higher to 8,327.95. Investors remained wary ahead of the weekend as geopolitical risks continue to dominate sentiment.

Wall Street enjoyed a strong rebound on Thursday, led by technology shares. The S&P 500 gained 0.81% to 7,543.64, the Dow Jones Industrial Average rose 0.27% to 52,487.41, and the Nasdaq Composite climbed 1.30% to 26,206.89. Semiconductor companies outperformed after fresh investment announcements linked to artificial intelligence infrastructure, helping offset wider geopolitical concerns.

Asian markets were mixed overnight. Japan’s Nikkei 225 advanced 1.20% on continued optimism surrounding technology stocks, while Hong Kong’s Hang Seng added 0.60%. In contrast, mainland Chinese equities weakened, with the CSI 300 falling 1.96% amid concerns over new European tariffs, weaker demand and slowing economic momentum.

Market Drivers

The dominant influence on financial markets remains the conflict between the United States and Iran. Although military action continued throughout the week, investors became more optimistic that the fighting would remain regionally contained rather than developing into a wider disruption of global energy supplies. Oil prices therefore retreated from their earlier highs, helping improve sentiment across equity markets.

Artificial intelligence also continued to support investor confidence. Strong demand for semiconductor companies, record investment announcements and Meta’s latest AI product launches reinforced expectations that AI spending will remain one of the strongest drivers of global corporate investment over the coming year.

Meanwhile, central bank policy remains firmly in focus. In the UK, Bank of England Chief Economist Huw Pill warned that interest rates may still need to rise if inflation remains above target. In the United States, Federal Reserve officials also continued to emphasise that inflation risks have not disappeared, reinforcing expectations that monetary policy will remain cautious.

Currencies

Sterling remained firm against the US dollar, with GBP/USD trading around 1.3411, while the pound bought approximately €1.1735 against the euro. The weaker US dollar reflected easing geopolitical fears and renewed appetite for risk assets, while sterling continued to benefit from expectations that UK interest rates could remain higher for longer.

Commodities

Oil prices remained volatile but finished well below Wednesday’s highs. Brent crude traded around $75.92 per barrel, while WTI crude stood near $71.68 per barrel as traders judged that the Middle East conflict was unlikely to cause a prolonged interruption to global oil supplies. Even so, the International Energy Agency warned that continued instability could delay efforts to rebuild global inventories.

Gold remained elevated at around $4,101.86 per ounce, reflecting ongoing demand for traditional safe-haven assets while geopolitical uncertainty persists. For UK businesses, energy markets remain the key area to watch, as any further disruption around the Strait of Hormuz could quickly feed through into transport costs, supplier prices and wider inflationary pressures.

Insolvency Watch

Administrations (3)

• ALCHEMY EXCHANGE LTD
• QUBE STRUCTURES LTD
• TRANS HAUL (EUROPE) LIMITED

Liquidations (7)

• AVA CONSULTANCY SERVICES LIMITED
• EMJ CONSULTING LIMITED
• MASELLI UK LIMITED
• MPL PUBCO LTD
• PASTON HARRISON LIMITED
• SILVERWOOD CONSTRUCTION INC LIMITED
• SYGNET SYSTEMS LIMITED

Winding-up Petitions (22)

• A.D.A SERVICES LTD
• AA LIGHTING LIMITED
• AUTORESTORE LIMITED
• BLAST UK LTD
• CEDARLINE VEHICLE SOLUTIONS LTD
• COLAS PARTNERS AND SOLUTIONS LTD
• COMBINE HEALTH LTD
• CORPORATION PUB CARDIFF LIMITED
• DALSTON HOSPITALITY LTD
• ECN CONTRACTORS LTD
• ELSEWHERE (UK) LIMITED
• ELY PUB COMPANY LTD
• FTM BUSINESS LTD
• HYD GREENFIELD LTD
• LI SAM VICKY CHIU LIMITED
• OMORFO LIMITED
• PENNSTATE PIPELINE SOLUTIONS LTD
• ROUX CONSULTING LIMITED
• SMARTCORNERSTORE LIMITED
• STEVENAGE CONFERENCE CENTRE LIMITED
• WALNUT ASSOCIATES LIMITED
• WILKINSON PROFESSIONALS LIMITED

Keeping cashflow moving when confidence is under pressure

Falling business confidence, continuing geopolitical uncertainty and the prospect of further tax and interest rate changes all reinforce the need for businesses to stay close to their cashflow. When customers become more cautious, payment delays often increase before wider economic conditions become visible in the headline data.

CPA helps businesses reduce credit risk through CreditCare business credit reports, continuous debtor monitoring, outsourced credit control and ethical recovery of overdue accounts. By identifying changing customer risk early and maintaining consistent credit management, businesses can improve payment performance while preserving valuable trading relationships.

If you’d like to strengthen your credit control or discuss support for recovering overdue invoices, we’re here to help.

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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