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

UK SMEs end the week facing a familiar combination of pressure points: expensive finance, persistent inflation risk and uncertainty over tax and regulation. The FCA has highlighted significant practical barriers for smaller firms seeking external finance, while the Bank of England is warning that rates could yet rise if energy costs feed through into wider inflation. Retail sales and revised productivity figures offer some encouragement, but for businesses selling on credit the message remains clear: protecting working capital and getting invoices paid promptly can reduce dependence on increasingly expensive external funding.

James Salmon, Operations Director.

Key Developments

• FCA identifies continuing barriers to SME finance, including complex applications, limited understanding of available products and concerns around high-cost alternative lending.
• Bank Rate remains at 3.75%, but three MPC members voted for an immediate increase and the Bank now expects inflation to exceed 4% in early 2027.
• UK retail sales rose 0.5% in August, reversing July’s decline and beating expectations.
• The 28 October Budget is coming under pressure from higher government borrowing costs, with economists estimating the Chancellor may need to find around £10bn.
• Global markets remain sensitive to interest rates, energy prices and geopolitics, with European equities lower this morning despite strong gains on Thursday.

SME & Business Environment

FCA highlights obstacles facing SMEs seeking finance

A Financial Conduct Authority review has found no evidence that FCA regulation itself is a major barrier to SME finance, but it identified significant problems elsewhere in the market. Businesses can struggle to understand the finance available, compare providers and navigate complex application processes and products.

The regulator also highlighted concerns around commission incentives in parts of the alternative lending market, where very small businesses can be directed towards expensive short-term finance. Personal guarantees remain another deterrent because business owners may be required to put personal assets at risk. The FCA says microbusinesses, which account for 95.5% of SMEs, can face some of the greatest difficulties.

Why it matters: When external finance is expensive, complicated or difficult to obtain, improving internal cash generation becomes even more important. Businesses selling on credit can strengthen resilience by checking customer risk, managing credit limits, monitoring debtors and acting quickly when invoices become overdue.

Retail sales return to growth

UK retail sales increased by 0.5% in August, reversing July’s 0.5% decline. The improvement was supported by household goods, clothing and food sales.

Stronger consumer spending is encouraging for businesses exposed to retail demand, although higher borrowing costs and inflation remain constraints on household budgets.

UK productivity estimates revised higher

The Office for National Statistics has revised its estimate of average annual UK productivity growth between 1997 and 2024 from 1.1% to 1.3% after adopting new methodologies and greater use of HMRC payroll data.

Output per hour is now estimated to be 41% higher than in 1997, compared with 34% under the previous methodology. Recent productivity performance may also be benefiting from stronger investment in technology and artificial intelligence.

Economy & Policy

Bank of England holds rates but inflation warning grows

The Bank of England kept Bank Rate at 3.75% for a sixth consecutive meeting, with the Monetary Policy Committee voting 6-3. Huw Pill, Megan Greene and Catherine Mann supported an immediate 25 basis-point increase to 4%.

The Bank has become noticeably more concerned about inflation following higher energy prices linked to the Middle East conflict. Its latest projections suggest inflation could reach around 3.75% in the final quarter of 2026 and slightly above 4% in Q1 2027.

Governor Andrew Bailey said persistent geopolitical pressures could eventually require tighter policy. The Bank also adjusted its quantitative tightening programme, pausing active bond-sale auctions for now and setting out plans for around £20bn of annual gilt sales alongside maturities.

Why it matters: The prospect of rates remaining high or rising again means SMEs cannot rely on cheaper finance arriving quickly. Higher borrowing costs can also weaken customers’ finances and increase the risk of slower payments.

Difficult Budget choices approach

Prime Minister Andy Burnham’s government faces a difficult Budget on 28 October, with rising government borrowing costs increasing pressure on Chancellor John Healey’s fiscal plans. Economists cited in current reporting estimate that the Chancellor may need to find around £10bn through additional revenue or spending restraint. The government has formally confirmed the 28 October Budget date and said it will operate within its fiscal rules.

Potential measures being discussed include higher taxation of banks and changes affecting capital gains, although final decisions have not been announced.

Tax & Government

Conservatives call for no further tax rises

Shadow Chancellor Andrew Griffith has urged the government not to raise taxes in the October Budget and has focused particularly on the burden facing smaller businesses. The Conservatives have also said they want to reduce regulatory costs and replace the current IR35 regime for self-employed workers.

Griffith also declined to confirm reports that the party could commit to abolishing inheritance tax, saying any such reduction would need to be properly funded.

Greater tax devolution proposed

KPMG head of tax policy Tim Sarson has argued that the new visitor levy should mark the beginning of wider fiscal devolution in England.

Only 4.8% of UK tax revenue was collected at local or regional level in 2023, compared with substantially greater proportions in countries including Canada and Germany. Sarson argues that more local revenue-raising power could encourage regional competition and investment, while warning that poorly designed devolution could deepen inequality between regions.

Industry & Investment

Thames Water creditors face parliamentary challenge

The Environment, Food and Rural Affairs Committee has urged the government to reject the current creditor-led rescue of Thames Water and consider placing the utility into the Special Administration Regime until a suitable long-term owner can be found.

Thames Water serves about 16 million customers and remains heavily indebted. MPs have raised concerns about creditors becoming effective economic owners without undergoing the same scrutiny expected of traditional shareholders. The committee has also called for clearer legislation governing when struggling water companies can be placed into special administration.

AI leaders gather in Scotland

King Charles III convened senior artificial intelligence leaders at Dumfries House in Scotland to discuss safety, control and the social consequences of increasingly powerful AI systems.

Participants included senior representatives from Nvidia, OpenAI, Google DeepMind and Anthropic. Nvidia chief executive Jensen Huang said developers should test systems rigorously and hold products back when they are not sufficiently safe. The gathering came amid a wider industry debate about the speed of frontier AI development.

Huang also gave an upbeat outlook for Nvidia’s chip business, saying he expects the company to sell substantially more processors over the coming year.

Apple begins latest iPhone rollout

Apple’s iPhone 18 Pro and iPhone 18 Pro Max go on sale across more than 65 countries, following their unveiling by new chief executive John Ternus.

Apple has also announced the iPhone Duo, its first foldable handset, which is expected to reach customers in October.

International & Trade

Trump threatens European tariffs over closer Canada-EU relationship

US President Donald Trump has threatened “very serious tariffs” or restrictions on trade with Europe if he regards proposals for a closer Canada-EU relationship as hostile. Canadian Prime Minister Mark Carney has supported deeper cooperation with Europe, while the European Commission has proposed a new form of associate relationship with Canada.

The US administration has separately moved to restrict Canadian-origin goods from some government procurement.

Global Market Summary

Markets are ending the week with interest rates, energy prices and geopolitical risk dominating sentiment. Thursday produced strong gains in the UK, Europe and US, but European markets have moved lower again this morning.

UK and Europe, 09:48 BST

• FTSE 100: 10,739, down 0.71%
• STOXX Europe 600: 640.13, down 0.38%
• Euro STOXX 50: 6,293, down 0.48%
• DAX: 25,560, down 0.61%
• CAC 40: 8,133, down 0.66%

The pullback follows strong gains on Thursday, when the FTSE 100 rose 1.19%. Hawkish ECB commentary, higher European gas prices and renewed geopolitical concerns are weighing on sentiment today.

United States, Thursday close

• S&P 500: 7,637.76, up 1.14%
• Dow Jones: 51,778, up 0.61%
• Nasdaq 100: 29,447, up 1.70%

Technology led the US recovery, with semiconductor stocks particularly strong. Falling oil prices also eased some inflation concerns and helped Treasury yields retreat.

Asia

• Nikkei 225: 65,019, up 1.38%
• Hang Seng: 24,751, up 0.60%

Japan’s market benefited from a weaker yen after the Bank of Japan raised its policy rate to 1.25% but delivered mixed signals about the pace of further increases.

Market drivers

The US Federal Reserve raised rates by 25 basis points to 3.75%-4.00%, its first increase since 2023. The Bank of Japan also tightened policy, while the Bank of England remained on hold and European Central Bank officials continued to warn about inflation risks.

Oil prices have eased for a third consecutive session, partially reducing immediate inflation concerns, but European gas prices are moving in the opposite direction as traders focus on winter storage levels and Middle East supply risks.

Technology and AI remain important sources of equity-market strength. Nvidia’s outlook supported semiconductor shares globally, while copper is close to $14,460 a tonne amid signs of recovering Chinese demand.

Currencies

GBP/USD: 1.3369, around 0.05% higher over 24 hours. Sterling was supported by stronger-than-expected UK retail sales and the Bank of England’s relatively hawkish stance.

GBP/EUR: approximately 1.164, modestly firmer based on the supplied cross-rates, with sterling slightly outperforming the euro.

Commodities

• Brent crude: $103.16 a barrel, down 1.58%
• WTI crude: $100.47 a barrel, down 1.41%
• Gold: $4,388 an ounce, up 1.07%

Oil has declined as some immediate supply fears ease, while gold remains supported by geopolitical uncertainty and lower real yields. European natural gas prices, however, have risen as traders focus on storage levels and winter supply.

For UK businesses, the market picture remains mixed. Lower oil prices offer some relief, but persistent gas costs, higher interest rates and volatile currencies continue to complicate budgeting and working-capital planning.

Insolvency Watch

Today’s insolvency notices contain 36 separate company entries: 4 administrations, 17 liquidations and 15 winding-up petitions.

Administrations (4)

• BLACK SALT SHEEN LIMITED
• NKAARA PROPERTIES LTD
• PH4RMACY LIMITED
• SALROOK HEALTHCARE LIMITED

Liquidations (17)

• BROWN AND BROUGHAM LIMITED
• CONWAY LAW ADVOCACY SERVICES LIMITED
• ENCOM SYSTEMS LTD
• FANTASY FLEET LIMITED
• HARROLD TECH LTD
• HFD FACILITIES MAINTENANCE LTD
• HFD GRILL LIMITED
• HFD UTILITIES LIMITED
• HF MANAGEMENT SERVICES LIMITED
• LLOYD BUILDERS INVESTMENTS LIMITED
• MIROWIL LTD
• MR & MRS ROSE PROPERTIES LIMITED
• OAK PUB (MIDLANDS) LTD
• SATCON LIMITED
• SIVA PROFESSIONALS LIMITED
• SYNAIRGEN RESEARCH LIMITED
• THE ROCKIEST PUB COMPANY LIMITED

Winding-up Petitions (15)

• ABACUS AGENTS LIMITED
• ACME IDEAS LIMITED
• BEDFORD CONSULTANCY SERVICES LIMITED
• CALIFORNIA KITCHEN CO (NI) LTD
• CANNA PLUS LTD
• CENTRAL LONDON RELOCATIONS LIMITED
• CITY PROPERTIES NEWRY LIMITED
• EAST NEUK SPIRIT COMPANY LTD
• EMAAN SUBS LTD
• ICE HOUSE BAR LTD
• MORTGAGE FIRST NEWRY LIMITED
• OHM TOPCO LIMITED
• RAZ FURNITURE LTD
• SMARTLIX LTD
• UK CHINESE BUSINESS CONSULTANTS LIMITED

For businesses supplying customers on credit, insolvency notices are an important reminder that financial deterioration can develop quickly. Regular debtor monitoring and early action on changes in payment behaviour can help prevent an overdue account becoming an unrecoverable loss.

Keeping cash moving when finance is harder to find

Today’s FCA findings underline an important point for SMEs: borrowing is useful, but external finance should not have to compensate for cash already trapped in unpaid invoices.

CPA can help businesses use CreditCare credit reports and debtor monitoring to identify changing customer risk, strengthen credit-control processes and improve payment performance.

Where invoices become overdue, CPA can support recovery through the professional and considerate approach of its Overdue Account Recovery Service designed to secure payment while preserving valuable customer relationships.

Early intervention matters. Recovering money already owed can strengthen liquidity without taking on additional debt, paying interest or providing personal guarantees.

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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