UK Business News Today – 16 April 2026 | Economy, Markets & Insolvencies
The UK economy delivered a stronger-than-expected performance in February, but the outlook has shifted sharply as geopolitical tensions, rising costs and tax pressures build. Businesses are navigating a complex environment where growth signals are being offset by higher borrowing costs, energy volatility and a rising tax burden. For SMEs trading on credit, the key theme is clear: conditions remain uncertain, and the risk of delayed payments and financial stress across supply chains is increasing.
James Salmon, Operations Director.
Key Developments
• UK tax burden set to rise sharply to 42.1% of GDP
• Strong February GDP masks weakening outlook post-Iran conflict
• Energy costs and interest rate uncertainty continue to weigh on businesses
• Hospitality and retail sectors show signs of strain
• Insolvency activity remains elevated across multiple sectors
SME & Business Environment
UK tax burden set to hit 42.1%
The IMF forecasts the UK tax burden will rise from 37.6% to 42.1% of GDP by 2031, the fastest increase among major economies. This equates to around £130bn in additional annual taxation, or roughly £4,500 per household. Growth expectations have also been downgraded, with the IMF now forecasting just 0.8% growth this year.
Why it matters: Higher taxes reduce business liquidity and increase pressure on customers’ ability to pay on time.
High earners use pensions to avoid tax traps
HMRC data shows higher earners are increasing pension contributions to mitigate tax exposure, with £1.4bn claimed in relief in 2023/24. Many are attempting to avoid the effective 60% marginal rate between £100,000 and £125,140. The trend highlights growing complexity in the tax system.
Why it matters: Complex tax pressures can distort income patterns and affect payment timing from higher-value clients.
HMRC warns of tax avoidance ‘red flags’
HMRC has warned workers, particularly those using umbrella companies, to check payslips carefully for signs of tax avoidance schemes. Individuals remain liable for any underpaid tax, even if misled. The warning reflects increased scrutiny and enforcement activity.
Energy cost relief expanded for manufacturers
The Government has expanded its energy support scheme, offering up to 25% reductions in electricity bills for around 10,000 energy-intensive firms. However, industry leaders say the measures fall short of addressing immediate cost pressures. Many businesses still face significant increases when contracts are renewed.
Why it matters: Energy volatility continues to drive cost inflation, increasing the risk of delayed supplier payments.
Economy & Policy
UK economy grows faster than expected
UK GDP rose by 0.5% in February, significantly above expectations of 0.1%. Growth was driven by services, production and construction, marking the first time all sectors expanded together since mid-2025. The data suggests underlying resilience before recent geopolitical shocks.
Why it matters: Strong past growth does not remove forward risk—payment behaviour may worsen as conditions tighten.
Growth outlook turns ‘bittersweet’
Despite the strong February data, economists warn the outlook has deteriorated following the Iran conflict. Rising energy costs, inflation risks and weaker forecasts could leave households worse off. Growth is now expected to slow sharply over the rest of the year.
Why it matters: Slowing growth increases late payment risk as customers prioritise cash preservation.
Housebuilding target under pressure
The Government’s 1.5m homebuilding target is under strain, with developers scaling back land purchases. Higher interest rates, rising costs and tax pressures are affecting project viability. Housing delivery remains well below target levels.
Why it matters: A slowdown in construction can ripple through supply chains, delaying payments to contractors and suppliers.
Banks cut mortgage rates, but costs remain high
Santander and TSB have reduced some mortgage rates, mainly for new buyers. However, average fixed rates remain elevated at around 5.89%. Market uncertainty continues to limit meaningful relief for borrowers.
Why it matters: Higher borrowing costs reduce disposable income, affecting consumer spending and payment capacity.
Rate outlook remains uncertain
Economists suggest rate cuts could come if Middle East tensions ease, but warn of possible hikes if inflation rises. Bank of England Governor Andrew Bailey has signalled no rush to act, highlighting the complexity of current conditions. Policymakers are balancing inflation risks against growth concerns.
Why it matters: Interest rate uncertainty complicates credit decisions and increases financial planning risk for SMEs.
Political pressure on central banks
Tensions in the US around Federal Reserve leadership have raised concerns about central bank independence. Political interference could unsettle markets and monetary policy expectations. This adds another layer of global uncertainty.
Industry & Investment
Franco Manca to close 16 restaurants
The pizza chain plans to close around 16 sites, with over 200 jobs at risk. Rising costs, including wages, tax and business rates, have made some locations unviable. The move reflects ongoing pressure in the hospitality sector.
Stonegate sells pubs amid falling sales
The UK’s largest pub operator sold 109 pubs after reporting falling revenues and rising debt. Pre-tax losses widened to £174m, with borrowing levels also increasing. Tax and cost pressures continue to weigh heavily on the sector.
Tesco reports strong results but cautious outlook
Tesco posted higher revenues and profits for the year but warned of a more cautious outlook ahead. Rising costs and uncertain consumer demand remain key concerns. The retailer expects profits to stabilise rather than grow strongly.
easyJet faces higher losses despite demand
easyJet expects a wider first-half loss due to rising fuel costs and provisions linked to geopolitical tensions. However, its holidays division continues to perform strongly. The mixed picture highlights cost pressures across the travel sector.
TSMC profits surge on AI demand
Taiwan Semiconductor reported a 58% rise in quarterly profits, driven by strong AI demand. Revenue and earnings both exceeded expectations, reinforcing the strength of the global tech sector. The company expects continued growth.
Musk explores major chip manufacturing project
Elon Musk’s team is exploring a large-scale chip manufacturing initiative, engaging suppliers and partners. The project aims to support AI and advanced technologies but remains uncertain. It reflects growing competition in semiconductor supply chains.
Global markets surge on de-escalation hopes
Asian and US markets rallied strongly on expectations of easing tensions in the Middle East. The S&P 500 and Nikkei hit record highs, supported by strong corporate earnings. Investor sentiment has improved significantly.
Starmer to meet tech firms over online safety
The UK government is considering tighter rules on social media, including potential age restrictions. The move reflects growing regulatory focus on digital platforms. Consultation is ongoing.
Global Market Summary
Global markets have rebounded strongly, driven by optimism that tensions between the US and Iran may ease. This shift in sentiment has fuelled a rally across equities, weakened the dollar and stabilised commodity markets, although underlying risks remain.
Equities
European markets weakened in the latest session, with the STOXX Europe 600 falling 0.4% and the FTSE 100 down 0.47%, dragged lower by sharp losses in luxury stocks. The STOXX Europe 50 also edged lower, while Germany’s DAX and France’s CAC 40 showed mixed performance but remain near recent highs.
In contrast, US markets surged. The S&P 500 rose 0.8% to 7,022.95, breaking above 7,000 for the first time, while the Nasdaq gained 1.2% and the Dow Jones was broadly flat. The rally was driven by strong technology stocks and upbeat earnings, particularly in AI-linked sectors.
Asian markets followed the positive momentum. The Nikkei 225 climbed to 59,518.34, while the Hang Seng rose to 26,385.41. South Korea’s Kospi surged 2.2%, and Chinese indices extended gains as tech stocks recovered losses linked to the Iran conflict.
Market Drivers
The dominant driver is geopolitical optimism, with markets pricing in a potential de-escalation in the Middle East. At the same time, strong earnings from companies like TSMC are reinforcing confidence in the technology sector.
However, weakness in European luxury stocks highlights how the conflict continues to impact consumer demand, particularly in travel and high-end retail.
Currencies
Sterling has strengthened slightly following stronger UK GDP data, with GBP/USD trading around 1.36. GBP/EUR sits at approximately 1.15, reflecting relative stability against the euro.
The US dollar has weakened for several sessions as risk appetite improves. The yen initially strengthened on intervention warnings but has since stabilised.
Commodities
Oil prices remain elevated but stable. Brent crude is trading around $96.26 and WTI at $92.62, both up roughly 1.4% on the day. While prices eased slightly on de-escalation hopes, supply constraints suggest energy costs may remain high.
Gold continues to trade at elevated levels around $4,843, reflecting ongoing uncertainty. Copper remains near record levels at $13,247, supported by strong demand and tightening supply.
Overall Market Picture
Markets are currently balancing optimism about geopolitical progress with ongoing concerns around inflation, energy costs and global growth. While sentiment has improved, volatility remains high and conditions can shift quickly.
Insolvency Watch
Administrations (18)
66/67 PS PROPERTY LIMITED
A CODA RESIDENCES LIMITED
B CODA RESIDENCES LIMITED
BOO SPORTS LTD
BRYANSTON COURT (GS) LIMITED
CATHERINE PLACE PROPERTIES LIMITED
CURZON SQUARE LONDON LIMITED
CURZON STREET (F9) LIMITED
DURWARD HOUSE PROPERTY LIMITED
FENCHURCH LEGAL LTD
HABITAS GROUP LTD
MAYFAIR (BS) LIMITED
MEATAILER LIMITED
OBSERVATORY GARDENS (HS) LIMITED
UK TRUCK & PLANT GROUP LTD
ZENROCK LABORATORIES LTD
30 PONT STREET LIMITED
7 BEAUFORT GARDENS LIMITED
Liquidations (28)
AESTHELIS LIMITED
ALBION NEUROSCIENCE LIMITED
ATRIUM PRESS LIMITED
B & C PLAZA LIMITED
CAV SYSTEMS GROUP LIMITED
CAV SYSTEMS HOLDINGS LIMITED
CLARKSON PROPERTIES LIMITED
CRABTREE CLEANERS LTD
DAVID IRONS & SONS LIMITED
DGR CONSULTING LTD
DOMANI INTERNATIONAL LIMITED
FIANDER TOVELL (CDG) LIMITED
GARNADE DIRECT LIMITED
GENMEAD LIMITED
JGP SALES LTD
LEAFZONE LIMITED
LISTER LEGAL RECRUITMENT LTD
LOUGHTON TYRES LIMITED
MB ACHIEVE (FR100) LIMITED
MDT GLOBAL SOLUTIONS LTD
P.M.WOOLNER LIMITED
RAINLODGE LIMITED
STANDARD CHARTERED NOMINEES (PRIVATE CLIENTS UK) LIMITED
SUSAN BURGIN LIMITED
T L C FORD LIMITED
VITAL MINDS BUSINESS TRAINING LTD
WSS ROOFING AND BUILDING SOLUTIONS LIMITED
Winding-up Petitions (9)
1101 Holdings Ltd
ECLIPSE EUROPE (LOGISTICS) LTD
GATE BUILDERS & PLUMBERS MERCHANTS LTD
OCG ACCOUNTANTS LTD
ONE CONSULTANCY GROUP LTD
REFORMA PAINTING SOLUTIONS LTD
SAJ EUROPEAN LIMITED
SAMIP LTD
SYGNITY LIMITED
Winding-up Orders (1)
RAITAKRAI PUTNEY LTD
What CPA can do for you
With tax pressures rising, costs increasing and insolvencies continuing across sectors, maintaining control of your cashflow has never been more important.
Late payments often increase during periods of uncertainty as businesses protect their own cash positions. Acting early can make the difference between recovery and write-off.
CPA helps you:
• Monitor customer risk with CreditCare reports
• Improve payment performance across your ledger
• Recover overdue invoices quickly and professionally
Call 020 8846 0000 to see how we can help protect your cashflow and your customer relationships.
Call 020 8846 0000 (business hours) 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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