UK Business News Today: 15 June 2026 | Economy, Markets & Insolvencies

UK businesses begin the week facing a mixed and uncertain outlook. The economy contracted in April, inflation expectations have climbed, and several commentators are warning that recession risks are rising. At the same time, global markets have rallied after a reported US-Iran interim agreement eased fears over energy supply disruption, sending oil prices lower. For SMEs that sell goods or services on credit, the key issue is whether lower energy pressure can offset weaker demand, higher borrowing costs, tax uncertainty and growing caution among customers.

James Salmon, Operations Director.

Key Developments

• UK GDP contracted by 0.1% in April, raising concerns about stagflation and recession risk.
• Household inflation expectations rose to 4%, adding pressure on the Bank of England.
• The Fed and Bank of England are both expected to hold interest rates this week.
• A reported US-Iran breakthrough triggered a global relief rally and pushed Brent crude down to around $83 per barrel.
• Insolvency notices continue across administrations, liquidations and winding-up petitions.

SME & Business Environment

UK economy shrinks in April

The UK economy contracted by 0.1% in April, according to the Office for National Statistics, marking the first monthly fall since August last year. The economy still grew by 0.7% in the three months to April compared with the previous quarter, but the monthly fall has raised concern that momentum is weakening. The decline was linked to the impact of the Middle East conflict, which pushed up costs for businesses and households while weakening consumer demand. Economists warned that the figures point to renewed fragility, with some raising concerns about stagflation and a possible economic standstill later in the year.

Why it matters: Weaker growth and rising costs can make customers slower to pay, while SMEs face tighter margins and less room to absorb late payment.

Government urged to act amid recession risks

Business groups and analysts have urged the Government to remove barriers to growth after the April GDP contraction. Services output fell by 0.2%, offsetting a 0.1% rise in construction and 0.4% growth in manufacturing. Anna Leach of the Institute of Directors said the focus should remain on removing barriers from tax and regulation and creating a predictable policy environment. Danni Hewson of AJ Bell warned of a “summer of sluggishness,” while Luke Bartholomew of Aberdeen said recession risks are elevated.

Why it matters: If customers become more cautious or demand weakens, SMEs selling on credit may see longer payment delays and greater pressure on working capital.

Inflation expectations soar

A Bank of England survey shows British households now expect inflation to average 4% over the coming year, up from 3.2% in the previous survey. Long-term inflation expectations also rose to a median of 3.9%, the highest since 2009. JPMorgan economist Allan Monks said the survey continues to show that price and wage pressures are building. This matters because expectations can influence wage demands, pricing behaviour and the Bank of England’s future rate decisions.

Bank of England expected to hold rates steady

The Bank of England is expected to keep interest rates at 3.75% this week, despite renewed inflation pressure. Economists expect the Monetary Policy Committee to remain cautious, balancing higher energy and price risks against a weaker growth outlook. Suren Thiru of ICAEW said a hold on Thursday looks highly certain. However, the stronger inflation backdrop means businesses cannot assume borrowing costs will fall soon.

Halligan warns global rate cycle is turning

Liam Halligan has argued that the global interest rate easing cycle may be coming to an end as inflation re-emerges across major economies. He believes UK inflation could reach 4% this autumn and that the Bank of England may need to raise rates twice before the end of the year. Higher rates would affect mortgages, corporate loans and business investment. His warning adds to the wider concern that the UK may be moving into a more difficult combination of weak growth and persistent inflation.

Bailey defends bond-selling strategy

Bank of England Governor Andrew Bailey has defended the Bank’s quantitative tightening programme, arguing that reducing gilt holdings is needed to give the Bank capacity to intervene again in future emergencies. He said profits from earlier bond purchases between 2013 and 2022 totalled £124bn, although current sales are taking place at lower prices. The policy has raised government borrowing costs by 0.4 percentage points from 2022 to 2024. Bailey said the aim is to rebuild policy space for future crises.

Tax & Government

Taxing times ahead as public finances struggle

Hamish McRae has argued that worsening public finances may leave the Government with little choice but to raise broad-based taxes. He suggests that smaller measures or further targeting of high earners are unlikely to raise enough revenue. Instead, income tax or VAT rises could be considered, with middle-income taxpayers likely to bear much of the burden. Higher taxes could weaken consumer spending at a time when unemployment, house prices and confidence are already under pressure.

Labour plans to shift tax income to local leaders

Ministers are considering a major shift in the English tax system by devolving control over business rates, or possibly income tax receipts, to regional mayors. Local government secretary Steve Reed said the Government wants local leaders to have more control over tax income. However, he also pointed to the need for an equalisation mechanism to prevent regional inequality. Supporters argue that devolving revenue could give local areas more certainty to invest and plan.

HMRC issues persist despite data surge

HMRC’s growing use of taxpayer data, digital reporting and AI-powered monitoring has not eliminated tax collection errors. Reports point to incorrect savings interest calculations and flawed tax code adjustments that have caused some taxpayers to overpay by thousands of pounds. HMRC now receives large volumes of financial information from banks, online marketplaces and overseas authorities. However, the greater use of data has also raised concerns about privacy, accuracy and Government overreach.

Cost of living tsar calls for triple lock to be undone

Lord Walker of Broxton, the Government’s cost of living tsar, has urged ministers to abolish the pensions triple lock. He described the policy as “profoundly unfair” and “mathematically unsustainable.” He also called for a more pro-growth approach to the economy. The comments add to a wider debate about how the Government balances pensioner support, public finances and economic growth.

Burnham would revisit Labour’s freeze on income tax

Andy Burnham has said he would revise Labour’s freeze on income tax if he became Prime Minister. He warned that pensioners are being harmed by the policy, with the Office for Budget Responsibility estimating that around 1m pensioners could be dragged into paying income tax for the first time. Burnham also said he would keep the pension triple lock for the remainder of the current parliament. A petition with 119,000 signatures is calling for a new tax code for state pensioners with a higher tax-free limit.

Minister defends new workers’ rights

Employment minister Kate Dearden has defended Labour’s workers’ rights reforms, arguing that they bring the UK closer to standards in other OECD countries. Businesses have raised concerns about the additional burden created by the Employment Rights Act. The Government is also consulting on regulations to replace zero-hours contracts, aiming to balance flexibility with job security. The issue remains important for sectors that rely on flexible staffing, including hospitality, retail and care.

Haldane calls for “chainsaw” cuts to regulation

Andy Haldane, former Bank of England chief economist and now president of the British Chambers of Commerce, has called for a drastic reduction in regulators and regulatory budgets. He said the economy now suffers from too little risk-taking rather than too much. Haldane argued that tighter post-financial-crisis regulation was right at the time, but that the current economy needs more agile regulation. He said subdued risk-taking is one of the main reasons growth remains weak.

Industry & Investment

Tim Martin urges tax rethink to support pubs

Wetherspoon founder Tim Martin has criticised higher employer National Insurance contributions and wage costs, warning that they are increasing pressure on pubs and hospitality businesses. He called for a level tax playing field between pubs and supermarkets, pointing to VAT differences on food sales. Martin also warned that high business rates, regulation and planning delays are contributing to high street decline. He stressed the social and economic value of pubs in local communities.

Brewers warn over packaging tax uncertainty

Brewers have warned that uncertainty around the Government’s Extended Producer Responsibility packaging levy is making it harder to budget and plan. The industry says delays in confirming charges could increase costs for pubs, brewers and consumers. The British Beer and Pub Association criticised the rollout, while Theakston warned that the levy already adds more to the cost of some bottles than the profit earned on them. Industry leaders fear higher costs may eventually be passed on to drinkers.

Retailers warn over import tax loophole

Retailers are urging the Government to speed up plans to close the £135 de minimis customs loophole. The rule allows overseas sellers such as Temu and Shein to ship low-value parcels duty-free, while UK retailers face import duties, VAT and compliance costs. Andrew Murphy, chief executive of The Entertainer, criticised plans to wait until 2029 for reform. Retailers warn that delay could put high streets at risk and turn the UK into a destination for low-cost imports.

Housing market slowdown expected to persist

The UK housing market is expected to remain sluggish into 2027, according to the EY Item Club. Economists cite weak consumer confidence, rising unemployment and high mortgage rates as key pressures. House prices rose by 2.7% last year but are forecast to rise by only 1.1% in 2026 and 0.7% in 2027. Recent data shows a significant decline in inquiries and sales, with some sellers reducing asking prices.

UK set to weaken electric car sales target

The Government is reportedly preparing to reduce the UK’s 2030 electric vehicle sales target. Current rules require 80% of all new cars sold in the UK to be electric by 2030, but pressure from car makers and unions could see the target reduced to between 50% and 70%. Manufacturers have raised concerns about costs and jobs. EV charging companies warn that another shift in net zero policy could deter investment because of reduced policy certainty.

Government may deny British Steel compensation

The Government may limit or refuse compensation to Jingye Group, the Chinese owner of British Steel, following the nationalisation of the steelworks. The Department for Business and Trade said any payout would be determined independently and only made if necessary. The issue remains politically sensitive because of national security, industrial strategy and public money concerns. It also highlights the pressure on strategic UK manufacturing assets.

UK seals £18bn Japan investment deal

The Government has finalised an £18bn investment agreement with Japan as it looks to strengthen international ties. Prime Minister Sir Keir Starmer said landmark agreements in technology and life sciences would support the UK economy and improve trade with Japan. The deal comes as the Government seeks to build post-Brexit international investment links. Japan remains one of the world’s largest economies and a key partner in advanced industries.

Technology, AI & Global Policy

US blocks foreign access to Anthropic AI models

The US Government has reportedly ordered AI firm Anthropic to stop all foreign access to its Mythos 5 and Fable 5 models over national security concerns. Reports suggest hackers were able to jailbreak the models and carry out restricted activities. The move highlights growing concern over the security and control of advanced AI systems. It also comes as AI regulation and international competition are rising on the G7 agenda.

SpaceX shares jump on Nasdaq debut

SpaceX shares rose strongly on their first day of Nasdaq trading, closing at $161, around 19% above the opening price. The company was valued at around $2.1trn, reportedly making Elon Musk the world’s first trillionaire. SpaceX raised $75bn in a record IPO after selling 555.6m shares at $135 each. The listing dominated US market sentiment on Friday and was seen as a major test of market liquidity.

Starmer announces under-16 social media ban

Prime Minister Keir Starmer has announced a full ban on children under 16 using major social media platforms. The ban is expected to be implemented in spring 2027, with legislation due by the end of the year. Exemptions are expected for some services such as YouTube Kids and Google Classroom. Starmer said the measure is needed to protect children’s safety and happiness, citing addictive features such as infinite scroll.

Defence & Geopolitics

PM will not spend more on defence

The Telegraph reports that Prime Minister Keir Starmer will not offer additional defence funding beyond the £13.5bn settlement that led John Healey to resign as Defence Secretary. Dan Jarvis, the new Defence Minister, is expected to look for savings within the Ministry of Defence. Healey accused Starmer of being unable to fund the department enough to keep Britain safe. The story also comes amid renewed tensions after Royal Marines interdicted a Russian-flagged oil tanker in the English Channel.

Healey backed global defence bank

BBC News reports that former Defence Secretary John Healey supported UK participation in an international Defence, Security and Resilience Bank. The bank would aim to bridge funding gaps and support UK defence businesses. Sources say the Treasury tried to halt negotiations because joining would require an upfront investment of around £870m. Healey resigned after warning that funding for the Government’s Defence Investment Plan fell well short of what was needed.

G7 summit begins in France

The G7 Summit begins today in Évian-les-Bains, France, with President Macron due to greet President Trump before a working dinner. Leaders are expected to meet tomorrow, including a session with President Zelensky. On Wednesday, there will be a meeting on AI with the CEOs of OpenAI, Google DeepMind and Anthropic. President Macron will later host President Trump for dinner at the Palace of Versailles to mark the 250th anniversary of US independence.

Global Market Summary

Global markets opened the week with a broad relief rally after the reported US-Iran interim peace deal. The market reaction was immediate: equities rose, oil fell sharply, the dollar weakened and gold moved higher. Investors treated the agreement as a potential turning point after months of energy disruption and geopolitical uncertainty, although analysts cautioned that the deal is interim, unsigned and still dependent on operational details around reopening the Strait of Hormuz.

Asian markets saw some of the strongest moves. The Nikkei 225 jumped 5.0% to 69,317.50, a record close, while the Topix rose 3.0% to 3,999.60. South Korea’s Kospi climbed 5.2% to 8,545.98, helped by AI-related stocks and energy importers. The Hang Seng rose 0.5% to 24,842.67, while the CSI 300 advanced 2.4% to 4,891.7. The S&P/ASX 200 rose 1.3% to 8,914.00, although energy stocks dragged as oil prices fell.

In Europe, equity markets also benefited from the improved risk mood. Euro Stoxx 50 futures moved to a record high and were around 0.9% higher in early trading. The FTSE 100 was up only around 0.2%, lagging peers because of its heavy exposure to oil and energy stocks. The STOXX Europe 600 and DAX were supported by the wider relief rally, while the CAC 40 also benefited from stronger risk appetite. The softer oil price is broadly positive for energy-importing economies, but it weighs on oil-heavy indices and energy producers.

In the US, S&P 500 futures were around 1.3% higher and Nasdaq 100 futures were around 2.1% higher by Monday morning. Technology shares were leading the move, with Nvidia, Meta, Microsoft, Tesla, Alphabet, Amazon and Apple all higher in pre-market trading. The Dow Jones was also expected to open stronger, although the tech-heavy Nasdaq was leading the relief rally. The SpaceX IPO had already dominated Friday’s US session, with the record listing helping test market liquidity without causing major dislocation.

Central banks remain a major theme this week. The US Federal Reserve is expected to hold rates in a 3.5% to 3.75% range on Wednesday, with new Fed Chair Kevin Warsh giving his first press conference. The Bank of England is expected to hold at 3.75% on Thursday, although the market will watch closely for signs that more MPC members are becoming concerned about inflation. The Bank of Japan is expected to raise rates by 25 basis points, while the European Central Bank remains alert to second-round energy price effects.

Currency markets reflected a clear unwind of war-related positioning. The Bloomberg Dollar Spot Index fell around 0.4%, extending the previous week’s decline, as the Iran deal removed one of the dollar’s main geopolitical supports. EUR/USD rose to around 1.1597, helped by risk appetite and a hawkish tone from the ECB. Sterling strengthened against the dollar as risk appetite improved, while GBP/EUR remained more stable given the euro’s own support from ECB messaging. USD/JPY remained around 160, with the yen lagging other major currencies despite the improved global mood.

In commodities, Brent crude fell sharply to around $83 per barrel, down more than 5% from Friday’s level and well below the levels seen during peak war fears. WTI crude fell to around $80 per barrel, briefly slipping below that level. European gas prices also dropped, with Dutch TTF gas falling to around €43.91/MWh, its lowest level in more than five weeks. Lower energy prices should ease some cost pressure, but analysts warned that Hormuz trade flows may take months to normalise fully.

Gold rose above $4,345 per ounce, gaining around 3%, despite the risk-on mood. The move appears to reflect lower real rate expectations and a weaker dollar rather than traditional safe-haven demand. Silver rose by around 4.1%, outperforming gold, while Bitcoin also climbed to a multi-week high. The unusual combination of stronger equities and stronger gold shows that markets are repricing both geopolitical risk and future central bank expectations at the same time.

For UK SMEs, the key market message is mixed. Lower oil and gas prices may ease some cost pressure, particularly for transport, manufacturing and energy-intensive firms. However, inflation expectations remain high, interest rates are not expected to fall soon, and uncertainty around the durability of the US-Iran agreement remains significant. Businesses selling on credit should treat the relief rally as welcome, but not as a reason to relax credit control.

Insolvency Watch

Administrations (3)

• DIRECT COMM LTD
• FAYERS PLUMBING & BUILDING SUPPLIES LIMITED
• SIFI NETWORKS AMERICA LIMITED

Liquidations (7)

• CANADA SQUARE FUNDING 2021-2 PLC
• ESA PARTNERS LTD
• GREENCOURT MANAGEMENT LIMITED
• HARRISONS DAIRIES LIMITED
• KESTIM MANAGEMENT LIMITED
• MALLABAR LIMITED
• STARBREEZE STUDIOS UK LIMITED

Winding-up petitions (1)

• WILLOW COURT SERVICES LIMITED

What CPA Can Do For You

When growth slows, inflation rises and customers become more cautious, unpaid invoices can quickly become a serious cashflow problem. Today’s news points to a familiar risk for SMEs: costs remain high, policy is uncertain, and customers may take longer to pay.

CPA helps businesses protect cashflow through CreditCare reports, debtor monitoring and professional overdue account recovery. Acting early helps preserve relationships while improving payment performance. If you are worried about overdue invoices or customer risk, call CPA on 020 8846 0000 (Monday to Friday, 9am to 5pm) or email PaidQuick@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.

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