UK Business News Today: 18 August 2026 | Economy, Markets & Insolvencies

The pressure facing UK businesses is becoming increasingly visible in the labour market. Vacancies have fallen to their lowest level in more than five years as smaller employers respond to rising wages, National Insurance, energy bills and wider operating costs by limiting recruitment. At the same time, household confidence has weakened, global borrowing costs are climbing and oil prices are rising again as tensions around the Strait of Hormuz intensify. For businesses selling on credit, this combination points to a need for closer monitoring of customers, stronger credit decisions and earlier action where payment behaviour begins to deteriorate.

James Salmon, Operations Director.

Key Developments

• UK job vacancies have fallen to 707,000, the lowest level in more than five years, with smaller firms cutting recruitment as employment and operating costs rise.
• Household confidence fell again in August, with consumers reporting greater job insecurity, falling incomes, depleted savings and increased debt pressures.
• Long-term government borrowing costs are rising sharply worldwide, increasing the risk of more expensive mortgages and business finance.
• AI is reshaping recruitment: 54% of businesses surveyed by Lloyds said the technology had created jobs, although hiring patterns are becoming increasingly uneven.
• Oil prices have climbed above $85 for WTI and $91 for Brent as renewed tensions around the Strait of Hormuz add to inflation and business-cost concerns.

SME & Business Environment

UK job vacancies fall to five-year low

The number of UK job vacancies fell to 707,000 in the May-to-July period, the lowest level in more than five years, according to the Office for National Statistics. Smaller businesses told the ONS that labour and operating costs were among the reasons they were scaling back recruitment. Unemployment remained at 4.9%, while private-sector wage growth slowed to 2.8%, its weakest pace for almost six years.

The wider picture is one of businesses becoming increasingly cautious about taking on additional fixed costs. Employers are dealing with higher National Insurance contributions, minimum wage increases, energy costs and continuing uncertainty about future regulation.

Why it matters: Falling vacancies suggest SMEs are protecting cash rather than expanding, which can also be an early warning that customers and suppliers are becoming more cautious about spending and payment commitments.

Employer hiring intentions remain subdued

Separate research from the Chartered Institute of Personnel and Development paints a similarly weak picture. Private-sector employment intentions have fallen to a record low reading of +11, while just 57% of employers plan to recruit during the next three months.

Despite weaker hiring intentions, 31% of employers continue to report hard-to-fill vacancies, highlighting the difficult balance between controlling employment costs and securing the skills businesses need.

Household confidence hits new low

S&P Global’s UK consumer sentiment index fell to 42.9 in August from 43.4 in July, its weakest level since the cost-of-living crisis began in 2023. Job insecurity is at its highest for almost three and a half years, while household incomes declined for the first time since April 2023.

Debt levels, depleted savings and concerns about possible future tax increases are also weighing on sentiment. Weaker consumer confidence can quickly feed through into lower discretionary spending, particularly for retail, leisure and hospitality businesses.

Why it matters: Businesses exposed to consumer spending may face softer sales and greater payment pressure further down their supply chains.

Private credit concerns increase

Analysis of data from fixed-income information provider Solve suggests the value of troubled loans held by some of the largest private debt investors has risen to levels last seen in 2017.

Private credit has become an increasingly important source of finance for companies outside traditional bank lending. A rise in stressed loans may therefore provide another indication that higher borrowing costs and weaker trading conditions are beginning to affect corporate borrowers.

Why it matters: Suppliers extending credit to highly leveraged businesses should monitor changes in payment behaviour closely, as financial stress can emerge before formal insolvency.

Economy & Policy

Rising global borrowing costs increase UK risks

Long-term sovereign borrowing costs are rising sharply across major economies. The yield on 30-year US Treasury bonds has reached 5.33%, its highest level since 2007, while long-term borrowing costs in several European markets are also at multi-year highs.

Governments are increasingly shifting debt issuance towards shorter maturities rather than locking in high financing costs for decades. Analysts have warned that sustained increases in US borrowing costs could spill into the UK through higher gilt yields, mortgage rates and corporate funding costs.

The European Central Bank has also raised concerns about European exposure to US technology shares, with an estimated €440bn of household investments linked to the sector.

Why it matters: Higher financing costs can weaken customers’ cashflow, increase refinancing risk and make prompt credit monitoring increasingly important.

Pension access age debate returns

Former pensions minister Sir Steve Webb has warned that the minimum age at which savers can access private pensions could eventually rise to 60. The normal minimum pension age is currently 55 and is already scheduled to increase to 57 in April 2028.

The Treasury has said there are no current plans to raise it beyond 57.

Tax & Government

Conservatives propose changes to youth working rules

The Conservative Party has proposed repealing restrictions governing the hours worked by 16- and 17-year-olds. Plans include allowing younger employees to work later and reducing some mandatory break requirements.

The party argues that greater flexibility would widen employment opportunities for young people and reduce regulatory burdens on businesses.

Making Tax Digital prompts new SME banking offer

Moneysupermarket has launched a business bank account aimed partly at helping smaller businesses manage Making Tax Digital requirements. The account starts at £5 per month for businesses depositing up to £750 and includes real-time transaction monitoring and direct VAT submission functionality.

The service is being positioned as a way for SMEs to simplify financial administration as digital tax reporting becomes more widespread.

Employment & Labour

AI is creating jobs — but changing who gets hired

A Lloyds Business Barometer survey of 1,200 companies found that 54% believed artificial intelligence had resulted in job creation. A quarter of employers said they were hiring more candidates with AI skills, while 20% were creating dedicated AI roles.

However, the wider employment picture remains complicated. Hiring for some AI-exposed occupations has weakened since 2022, while companies are increasingly favouring experienced employees who already possess AI skills.

Larger businesses appear better prepared: around two-thirds of firms with turnover above £10m believe their existing workforce has the AI skills required, compared with just over half of businesses overall.

UK tech visa applications decline again

Applications from overseas technology workers for UK visas fell 7% to 34,936 in 2025, according to figures obtained by RSM UK. Applications have now fallen substantially from the 53,729 recorded in 2022.

Technology businesses continue to report difficulties attracting specialist talent, with visa cost and complexity cited as barriers.

Retail & Consumer

Pub planning protection may not stop closures

Hospitality and construction industry representatives have warned that new planning protections for pubs are unlikely to solve the financial pressures behind closures. Developers would have to demonstrate that a pub had no reasonable prospect of remaining viable before converting it to another use.

UKHospitality argues that taxes, alcohol duties and employment costs remain the more fundamental problem. CAMRA figures indicate that at least 1,836 pubs have closed since the beginning of last year.

Frasers Group moves closer to Hugo Boss majority

Frasers Group has received valid acceptances covering 12.2 million Hugo Boss shares, taking its ownership or accepted holdings to just under 48% of the German fashion company.

Frasers still needs to cross the 50% threshold to secure majority control. Its offer remains €38 per share despite Hugo Boss previously describing the valuation as inadequate.

Ferrari electric model achieves $40m auction price

A one-off version of Ferrari’s first electric vehicle, the Luce, has sold for $40m at a charity auction, setting a record hammer price for a new car.

The model attracted mixed reactions following its launch in May, including debate around its Sir Jony Ive-designed exterior. Ferrari’s share price initially fell 8% following the unveiling but has since recovered.

Industry & Investment

Government reviews 2030 vehicle target

The Government is reportedly reconsidering the requirement for 80% of new vehicle sales to be zero-emission by 2030, with officials considering reducing the target to around 50%.

All new cars are still intended to be zero-emission by 2035. Industry representatives argue that overly aggressive interim targets could raise costs for manufacturers and potentially slow rather than accelerate the transition.

Ultimate Finance approaches Time Finance

Ultimate Finance, backed by Joe Lewis’s Tavistock Group, has proposed a £55.13m cash offer for SME lender Time Finance. The proposal values Time Finance shares at 59.1p each, representing a 12.6% premium to the quoted market price.

The combination could create a specialist lending platform with close to £650m of lending capacity.

Luxury property developer enters administration

London Richmond has entered administration after running out of cash amid weakness in London’s prime residential property market. BTG has been appointed administrator.

The business specialised in high-end developments in areas including West Hampstead and South Kensington, where falling property values have increased pressure on developers.

International & Trade

Oil rises as Strait of Hormuz tensions intensify

Oil prices have moved higher as tensions surrounding Iran and the Strait of Hormuz escalate. President Donald Trump has said he is not interested in extending the recently expired US-Iran agreement, while a vessel was reportedly struck by an unknown projectile in the strait.

The renewed disruption risk has pushed WTI crude above $85 a barrel and Brent above $91. The Strait of Hormuz remains one of the world’s most important energy transport routes.

Global Market Summary

Global markets were in a risk-off mood on Tuesday morning as higher long-term bond yields, rising oil prices and renewed geopolitical tensions weighed on sentiment.

UK and Europe

• FTSE 100: 10,709.13, down approximately 0.10%
• STOXX Europe 600: 652.77, down 0.55%
• Euro STOXX 50: 6,486.87, down 0.67%
• DAX: 26,199.24, down 0.53%
• CAC 40: 8,530.55, down 0.57%

The FTSE was proving more resilient than continental European markets because higher oil prices supported BP and Shell, while a softer pound benefited companies earning significant revenues overseas.

Technology and industrial shares were among the weaker areas of the European market as higher bond yields reduced investor appetite for rate-sensitive assets.

United States

Wall Street closed lower on Monday:

• S&P 500: 7,745.06, down 0.52%
• Dow Jones Industrial Average: 53,459.78, down 0.51%
• Nasdaq Composite: 26,644.91, down 0.32%

US markets were pressured by the rise in long-term Treasury yields and higher oil prices. The 30-year US Treasury yield reached 5.33%, its highest since 2007.

S&P 500 futures were around 0.22% lower on Tuesday morning, while Nasdaq 100 futures were down approximately 0.74%, suggesting another cautious opening.

Asia

• Nikkei 225: 67,460.73, down 2.54%
• Hang Seng: 25,471.15, up 0.07%

Japan recorded the sharpest major decline as rising bond yields hit technology and other growth-sensitive stocks. South Korea also weakened, while Hong Kong finished broadly unchanged.

Market drivers

The dominant force across global markets is the sharp rise in long-term government borrowing costs. US, French and German long-dated bond yields have reached levels not seen for many years, reflecting persistent inflation concerns, government borrowing requirements and changing expectations about interest rates.

Oil is adding another layer of uncertainty. Renewed tension around the Strait of Hormuz has increased concerns about global energy supplies just as central banks continue to assess whether inflation has been sufficiently contained.

UK labour-market data also contributed to the morning’s moves. Falling payroll employment and vacancies suggest the jobs market is cooling, while wage growth remains strong enough to complicate the Bank of England’s policy decisions.

Currencies

Sterling weakened modestly following the UK employment data.

• GBP/USD: approximately $1.3530, down around 0.10%
• GBP/EUR: approximately €1.169, down around 0.06%

The softer pound provides some support for large UK-listed companies with significant overseas earnings, although it can also make imported goods, components and energy more expensive for UK businesses.

Commodities

• Brent crude: $91.13 a barrel, up 0.29%
• WTI crude: $85.16 a barrel, up 0.78%
• Gold: $4,397.98 an ounce, down 0.41%

Oil remains the most important commodity move for UK businesses. A sustained rise would increase transport and production costs and could feed back into inflation.

Copper prices fell on the day despite evidence of significant short-term supply tightness. BHP’s latest results also highlighted copper’s increasing importance, with the metal accounting for 54% of underlying EBITDA.

For business owners, the message from markets is less about daily trading movements and more about the direction of financing and input costs: borrowing is becoming more expensive, energy prices are elevated and uncertainty remains high.

Insolvency Watch

Administrations (6)

• CLANCY CONSULTING LTD
• LONDON RICHMOND LIMITED
• PEARSON HAM CONSULTING LIMITED
• PROJECT AUDIO VISUAL LTD
• TX BS1 LTD
• TX HUB LTD

Liquidations (13)

• A M SZWAGRZAK LIMITED
• A.HICKS LIMITED
• ANGLO SWISS FINANCE LIMITED
• BEACON STABLES LTD
• C CHIEFS TRADING LTD
• CYNON PROTECTION LTD
• DOSLOBITOS SERVICES LIMITED
• GTL CONSULTING LTD
• JOHN P LIMITED
• M. COOPER (ELECTRICAL) LIMITED
• SOUTH EAST VISION AND IMAGING LIMITED
• TSCT HALL INVESTMENTS LTD
• WORLDFLOOR RETAIL LIMITED

Winding-up Petitions (1)

• PERTHSHIRE CHAMBER OF COMMERCE

Why stronger credit control matters as confidence weakens

Today’s news is a reminder that financial stress does not always announce itself dramatically. It can start with a customer taking a few days longer to pay, asking for extended terms, reducing orders or becoming harder to contact.

With vacancies falling, consumer confidence weakening, financing costs rising and insolvencies continuing across a wide range of sectors, businesses selling on credit should be looking closely at the quality of their debtor books.

CPA can help Members strengthen that process through CreditCare credit reports, ongoing debtor monitoring, structured credit control support and professional recovery of overdue accounts.

Early action matters. CPA’s approach is designed to improve payment performance while preserving valuable customer relationships wherever possible.

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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