UK Business News Today: 13 October 2026 | Economy, Markets & Insolvencies

UK growth prospects have improved, but the outlook remains challenging for businesses selling on credit. Rising borrowing demand, cautious recruitment, weak retail growth and continued energy pressures suggest that stronger headline activity is not translating evenly into healthier customer finances. With the Budget approaching, businesses should watch payment behaviour closely and avoid allowing overdue balances to become a source of funding for customers under pressure.

James Salmon, Operations Director.

Key Developments

• The IMF raises its UK growth forecast to 1.3% for 2026, while urging restraint on cost-of-living support.
• 56% of business leaders report arranging new borrowing or credit, double the proportion in 2025.
• Retail sales growth remains subdued as grocery inflation rises and retailers warn against additional taxes.
• Energy and freight costs remain elevated despite a fall in crude prices.
• Today’s supplied notices cover 1 administration, 21 liquidations and 2 winding-up petitions.

Economy & Policy

IMF upgrades UK growth but warns against broad Budget giveaways

The IMF has raised its UK growth forecast from 1% to 1.3% for 2026, while reducing its 2027 forecast from 1.3% to 1.2%. It expects inflation to average 3.3% this year and 2.8% next year, with core inflation returning to 2% by the end of 2027. The forecasts assume the Strait of Hormuz reopens in March 2027 and returns to normal operations by October, making the outlook sensitive to further disruption.

The IMF urged Chancellor John Healey to keep cost-of-living support targeted and temporary, warning that broad subsidies or tax cuts could complicate inflation control. Its relatively favourable assessment of UK fiscal consolidation comes alongside public debt of approximately 94% of GDP.

Why it matters: Improving growth offers opportunities, but persistent inflation and expensive finance can still weaken customers’ ability to pay promptly.

Budget pressure grows as financial headroom narrows

The Resolution Foundation says the Chancellor’s financial headroom has fallen from £24bn to £12bn, reflecting higher borrowing costs amid the Middle East conflict. Separately, the IFS has urged the government to explain how it will fund a reported £35bn spending shortfall. These are different measures, but both underline the difficult choices surrounding the 28 October Budget.

Why it matters: Businesses should allow for potential changes to taxes and support measures when reviewing cashflow forecasts.

Frozen income tax thresholds increase pressure on household budgets

The IFS estimates that inflation interacting with frozen income tax thresholds could generate an additional £9bn annually by 2029/30. The supplied report says the freeze, originally due to end in 2026, has been extended to 2031. As nominal earnings rise, more income becomes taxable or falls into higher bands.

Welfare and infrastructure spending debate intensifies

Centre for Social Justice research says working-age welfare spending exceeded infrastructure investment by £1.1trn between 2006 and 2025. It puts current benefits spending at approximately 4.6% of GDP, against public investment of 2.9%. The organisation argues that governments should place greater emphasis on reversing regional economic decline.

SME & Business Environment

Business borrowing demand doubles

An HSBC UK survey finds that 56% of business leaders arranged new borrowing or credit over the past year, compared with 28% in 2025. Firms are seeking finance both to manage inflation and utility costs and to invest in technology and productivity. Businesses pursuing growth are particularly likely to seek new funding.

Why it matters: Additional borrowing may support expansion or signal financial strain, so credit decisions should consider its purpose alongside payment history.

Tax & Government

Retailers warn that further taxes will feed through to prices

Retail leaders from Tesco, Sainsbury’s, Amazon, the Co-op and Marks & Spencer have warned the Chancellor that additional taxes would push prices higher. They identify business rates, employment taxes and energy bills as continuing sources of pressure. UKHospitality is separately calling for the sector’s VAT rate to be reduced to 10%.

Employment & Labour

Reed proposes AI and robot taxes to support younger workers

James Reed has called for taxes on robots and AI tools, arguing that the proceeds could help reduce the cost of hiring young workers. He warns that disappearing entry-level roles could damage the future talent pipeline. A cited CBI poll finds that 75% of firms regard high employment costs as a major labour-market threat; the tax proposal is a call for policy change, rather than an announced measure.

London finance recruitment becomes more selective

Morgan McKinley reports that London finance vacancies fell from 1,719 in July to 1,200 in September, a decline of approximately 30%. Across the quarter, vacancies were down 6% quarter-on-quarter and 11% year-on-year. The firm attributes the cautious hiring environment to economic pressures and uncertainty over potential Budget tax increases.

Redundancy proposals rise while the tax-free threshold remains unchanged

The supplied report puts proposed redundancies at 50,904 in September, the highest since October 2020, citing Insolvency Service figures. It also highlights that the £30,000 tax-free threshold for qualifying termination payments has remained unchanged since 1988. This threshold concerns tax treatment and should not be confused with the separate rules governing statutory redundancy entitlement.

Younger workers consider reducing pension contributions

Raindrop research finds that more than half of adults aged 18–29 could reduce or stop pension contributions over the next year. Some 47% fear a retirement savings shortfall and 48% expect to work longer to compensate. The risk of reducing contributions also affects 35% of millennials, 19% of Generation X and 18% of baby boomers.

Retail & Consumer

Retail growth remains weak as grocery inflation increases

BRC and KPMG figures show September retail sales rising 1.3% year-on-year, compared with 2.3% a year earlier. Food sales increased 2.5%, while non-food sales grew just 0.3%; the separate like-for-like measure in the market recap rose 1.0%. These measures describe different aspects of sales performance and should not be treated as interchangeable.

Worldpanel by Numerator reports grocery price inflation of 2.5% in the four weeks to 4 October, up from 2.3%. Take-home grocery sales increased 1.0%, with shoppers increasingly seeking promotions.

Industry & Investment

Development costs threaten housing viability

A commission led by Lord Barwell says taxes and regulatory requirements have added £38,030 to the cost of an average new home since 2020. It warns that tens of thousands of planned homes have become unviable and recommends a three-year freeze on new development costs. Barwell argues that demand support must be accompanied by measures that improve project profitability.

Heathrow argues that capacity constraints are diverting UK trade

Heathrow has renewed its call for parliamentary approval of a third runway after handling nearly 7.2 million passengers in September. More than 40 airlines sought slots that the airport could not accommodate, while cargo volumes increased 5% year-on-year. Heathrow argues that expansion could increase export capacity by 50%, a projected benefit rather than an achieved increase.

Takeovers continue to outpace new London listings

Peel Hunt reports 42 ongoing bids worth £74bn for London-listed companies, compared with 40 bids worth £35bn in 2025. Since the start of 2023, it counts 166 bids exceeding £100m, collectively worth more than £180bn, against just 11 IPOs worth £6bn. Overseas buyers account for 64% of this year’s bids.

Technology launches continue despite AI investment concerns

Meta has released Muse Wonder, which it says places the company at the frontier of AI development, with its shares rising 4.7% in the supplied report. Apple is expected to announce new smart-home products, while Meta plans to ship audio-only Ray-Ban AI glasses without cameras. These developments sit alongside growing investor scrutiny of AI spending and returns.

Global Market Summary

Equities: Asian technology stocks lead the decline

AI and semiconductor concerns drove a sharp Asian selloff. South Korea’s Kospi fell 5.5%, triggering a sidecar trading halt, while Samsung Electronics and SK Hynix lost approximately 7–10% following reports of a new memory chip design from China’s CXMT. Japan’s Nikkei and Taiwan’s Taiex fell roughly 2%, while the MSCI Asia Pacific Index declined as much as 2.1%.

European equities moved in the opposite direction, with the STOXX Europe 600 up approximately 0.5% this morning, helped by lower oil prices and earnings news. Nasdaq 100 futures fell 0.8%; this is a futures move, not the Nasdaq Composite’s cash-market performance.

The supplied benchmark series showed month-to-date returns of +1.7% for ES1, +0.4% for VGA and −1.5% for NKA. These series are not substitutes for missing daily cash-index figures.

Energy, commodities and currencies

Brent crude fell approximately 1.3% to $105.30 a barrel, while WTI eased to $92.05, with no percentage move supplied. Gold stood at $4,189.72, also without a supplied percentage change. European natural gas futures rose for a sixth consecutive session, reaching their highest level since December 2022 and gaining approximately 18% month-to-date.

Goldman Sachs estimates average global crude freight rates have risen from $4 to $30 a barrel over a year, reaching $35 on Middle Eastern routes. These are crude-shipping estimates, rather than general freight charges, but illustrate the scale of energy transport disruption.

Bonds, interest rates and growth

US Treasuries attracted demand, taking the 10-year yield to approximately 5.19%. Supplied bond indices showed positive month-to-date returns, ranging from 0.11% to 0.63%, although most remained negative for the year. US corporate investment-grade bonds yielded approximately 5.99%, compared with 8.24% for high-yield bonds.

Bank of England policymakers Megan Greene and Catherine Mann voiced concern about persistent inflation and wage pressures. The supplied material distinguishes market expectations of a November rate increase from the IMF’s assessment that the current 3.75% rate is already restraining prices. US Federal Reserve commentary also stressed broad inflation pressures and the influence of AI investment on yields.

The IMF raised its global growth forecast to 3.1%, but warned of uneven outcomes and risks from energy disruption. German annual inflation was confirmed at 3.3%, while Japan’s producer-price inflation eased to 6.8%.

Earnings, trade and geopolitical drivers

US bank results from JPMorgan, Wells Fargo, Citigroup and Goldman Sachs are due later today with lending conditions and credit quality in focus. LVMH reported 1% organic revenue growth to €18.50bn, while Fashion & Leather Goods sales fell 5%. BP reported net debt of approximately $13.5–14.5bn, reaching its 2027 target early.

Broadcom’s chief executive questioned the clarity of AI investment returns, although the company retains substantial growth ambitions. Murata reported continuing AI-related component demand, while US regulators were reportedly examining banks’ AI controls. BofA highlighted competition between AI infrastructure borrowing and emerging-market sovereign funding; its investor survey also showed strong technology exposure alongside concerns about a future AI bubble.

Geopolitical influences included a reported Russia–Ukraine pause on energy-infrastructure attacks, US easing of Russian diesel restrictions, additional EU sanctions and continuing Middle East security risks. EU–China trade tensions and China’s planned reduction in the new-energy-vehicle export VAT rebate from 13% to 9% on 1 April 2027 added uncertainty.

Insolvency Watch

Administrations (1)

• ACRE ROAD (GLASGOW) DEVELOPMENTS LTD

Liquidations (21)

• BOSCH AUTOMOTIVE SERVICE SOLUTIONS LTD
• CRATHORNE COLLABORATIVE LTD
• DATALEC BUSBAR INSTALLATIONS LIMITED
• EMMJAM LTD
• GEMSBOK FINANCING LIMITED
• GOLDENEYE SOLUTIONS LIMITED
• HA INSTALLATIONS 22 LIMITED
• HEATH PROPERTY INVESTMENTS LIMITED
• IPM FOCUS LTD
• LIGHTBOX JEWELRY LTD.
• LISA KING DESIGNS LTD
• NEW ELICIT CONSULTING LTD
• SATURN TECHNOLOGIES LTD
• SIA ABRASIVES (G.B.) LTD
• SO FEED ME LIMITED
• STARTUP STAGE LIMITED
• THE LAST GENTLEMAN OF KENT LIMITED
• UHURU LIMITED
• VEITCH FAMILY HOLDINGS LIMITED
• WEALD PROPERTY INVESTMENTS LIMITED
• WORLDCREST LIMITED

Winding-up Petitions (2)

• DEMA GROUP LTD
• OAKLANDS FITNESS LIMITED

Keeping cash moving as customers face higher costs

When customers face rising costs and tighter budgets, overdue invoices can quickly put pressure on your own business. CPA’s Overdue Account Recovery Service uses a professional and considerate approach designed to secure payment while preserving valuable customer relationships.

CPA can also help businesses use CreditCare credit reports and debtor monitoring to identify changing customer risk, strengthen credit-control processes and improve payment performance. Together, these services support informed credit decisions and timely action when payments fall behind.

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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