UK Business News Today: 19 August 2026 | Economy, Markets & Insolvencies

UK businesses face a more difficult cost and credit environment as insolvency figures continue to highlight pressure on both companies and consumers. Inflation accelerated to 2.9% in July. Long-term borrowing costs have also risen sharply and hiring demand has weakened. The combination increases the importance of monitoring customer financial health, controlling exposure and acting quickly when invoices become overdue.

James Salmon, Operations Director.

Key Developments

• Personal insolvencies rose 14% year-on-year in July, while company insolvencies increased 5% from June.
• UK inflation rose to 2.9% in July, with higher energy bills the main driver.
• UK long-term borrowing costs have climbed towards 6% as global bond markets react to inflation, debt and energy concerns.
• UK job vacancies have fallen to a five-year low of 707,000 as smaller firms rein in recruitment.
• Oil prices remain elevated as Middle East tensions add further uncertainty to energy costs and inflation.

Economy & Policy

Insolvency & Credit Risk

Personal insolvencies rise sharply in July

Some 11,926 individuals entered insolvency in England and Wales during July, 14% more than in July 2025.

Individual voluntary arrangements increased particularly sharply, rising 27% to 7,442. Over the past year, IVAs accounted for 59% of personal insolvencies, debt relief orders for 35% and bankruptcies for 6%.

The figures suggest household finances remain under significant pressure despite signs that some underlying inflation measures are easing.

Why it matters: Rising personal financial distress can affect sole traders, company directors and consumer-facing businesses, increasing the importance of assessing payment risk before extending credit.

Company insolvencies increase from June

There were 1,931 registered company insolvencies in July, according to the Insolvency Service. That was 5% higher than in June, although 5% lower than in July 2025.

Advisers highlighted continuing pressure in sectors such as retail and construction, where tight margins, high operating expenses and weak financial buffers leave businesses particularly exposed.

Why it matters: Suppliers selling on credit should treat deteriorating customer finances and repeated payment delays as early warning signs rather than waiting for formal insolvency.

UK inflation rises to 2.9% as energy bills jump

UK consumer price inflation accelerated to 2.9% year-on-year in July, up from 2.6% in June and its highest level since March. Prices rose 0.3% month-on-month, in line with expectations, with much of the increase reflecting a 13% rise in the household energy price cap.

There were some more encouraging details beneath the headline figure. Services inflation eased from 3.6% to 3.4%, while core inflation was 2.6%. Cheaper motor fuel and downward pressure from air fares also provided some offset, but further inflation pressure is expected if the Middle East conflict continues to keep energy prices elevated.

The figures leave inflation noticeably above the Bank of England’s 2% target and make the outlook for interest rates less comfortable, although softer services inflation and slowing private-sector wage growth may reduce the need for an immediate rate rise.

Why it matters: Higher energy and financing costs can squeeze SMEs directly while also reducing customers’ ability to pay invoices promptly.

Borrowing costs climb as investors worry about inflation and debt

Long-term government borrowing costs have risen sharply across several major economies. US 30-year Treasury yields briefly moved above 5.3%, their highest since 2007, while UK long-term borrowing costs reached around 5.85%.

Investors have become increasingly concerned about inflation, high government debt, heavy borrowing requirements and the impact of rising oil prices. Higher bond yields can feed through into commercial borrowing, mortgages and wider financing conditions.

The US Treasury later announced plans to increase long-dated bond buybacks, helping the 30-year Treasury yield fall back towards 5.19%.

Why it matters: Persistent high borrowing costs can weaken business investment, increase refinancing pressures and make already stretched customers more vulnerable to late payment.

BCC warns that resilience alone will not deliver growth

British Chambers of Commerce director general Shevaun Haviland has urged the Government to do more to reduce the cost of doing business, arguing that resilience alone will not generate stronger economic growth.

The BCC says policy-related costs faced by mid-sized companies have increased by more than 75% over the past decade. It has identified October’s Budget as a pivotal opportunity for the Government to support businesses through lower costs and measures designed to encourage investment and growth.

Employment & Labour

UK job vacancies fall to five-year low

UK job vacancies have fallen to 707,000, their lowest level in more than five years, according to the Office for National Statistics. Smaller businesses in particular are reducing recruitment as labour costs and wider operating expenses continue to rise.

Regular earnings increased by 3.5% year-on-year in the three months to June. Public-sector wages rose 6.1%, while private-sector pay increased by just 2.8%, the slowest rate of growth in almost six years.

Unemployment remained at 4.9%, while the number of payrolled employees declined in both June and July.

Tax & Government

HMRC cancels record number of tax penalties

HMRC overturned 48,189 tax penalties during 2025/26, up 4% on the previous year. Around 65% of penalties challenged by taxpayers were ultimately cancelled.

The figures have raised concerns over automatically generated fines relating to Self Assessment, VAT and tax-payment deadlines, with advisers warning that high-volume automated processes can result in incorrect notices.

Overall, HMRC issued around 8.1 million penalties during the year, down from approximately 9.1 million in 2024/25. Businesses within Making Tax Digital are moving towards a points-based regime in which repeated missed deadlines can eventually trigger a £200 fine.

Energy & Costs

Net-zero strategy could add £540 a year to household bills, report claims

A report from think tank Onward argues that Britain’s current approach to net zero could add approximately £540 a year to household energy bills.

It says heavy reliance on wind and solar requires substantial additional investment in pylons, transmission cables, energy storage and other infrastructure. The report argues that a broader mix of nuclear power, gas and renewables could reduce system costs by around £320 billion between 2030 and 2050 while still producing roughly 80% of electricity from clean sources.

International & Trade

Trump gives Canada three-day reprieve from 50% tariffs

US President Donald Trump has paused a planned 50% tariff on billions of dollars of Canadian imports for three days, moving the deadline to 22 August while negotiations continue.

Canadian Prime Minister Mark Carney said there remained important work to be done. Trump also suggested that the previously cancelled Keystone XL oil pipeline between Canada and the United States could be revived.

Markets were watching the negotiations closely, with the Canadian dollar strengthening after the delay was announced.

Middle East tensions keep energy risk elevated

The Middle East conflict remains one of the biggest external risks for UK businesses. Brent crude was trading above $92 a barrel as tensions around Iran and the Strait of Hormuz continued to create concerns about oil and fuel supplies.

The UAE suspended trade and financial transactions with Iran following missile attacks, while US-Iran negotiations remained stalled. Brent was around 15% higher over a two-week period, according to the supplied market data.

Industry & Investment

Nasdaq prepares for almost round-the-clock US share trading

Nasdaq plans to introduce almost 23-hour weekday trading in US equities from December 2026.

The new overnight session is expected to run between 9pm and 4am Eastern Time, complementing Nasdaq’s existing pre-market, regular and after-hours trading periods and leaving only a short daily pause. The move reflects increasing global demand for access to US equities outside traditional Wall Street hours.

The New York Stock Exchange has also secured approval for substantially extended trading.

US states take Meta to court over social-media design

Twenty-nine US states have brought a major legal action against Meta, alleging that Facebook and Instagram were deliberately designed to encourage addictive behaviour among children.

The states are seeking damages potentially worth tens of billions of dollars. Meta disputes the allegations and argues that research has not established a clear causal link between social-media use and the mental-health difficulties experienced by some users.

The outcome could have significant implications for the regulation and design of large social-media platforms.

Global Market Summary

Financial markets remain dominated by three connected themes: rising long-term borrowing costs, elevated energy prices and a reassessment of highly valued technology and AI-related shares.

In the UK, the FTSE 100 was up 0.22% at 10,751.17 during Wednesday’s session, helped by energy shares as oil prices remained elevated. The broader STOXX Europe 600 was marginally lower at 651.72, while the Euro STOXX 50 fell 0.25% to around 6,452. Germany’s DAX was effectively flat at 26,131.58, and France’s CAC 40 edged 0.06% higher to 8,514.47.

US shares recovered during Wednesday’s session after three consecutive declines. The S&P 500 was up 0.49% at 7,729.35, while the Dow Jones gained approximately 0.62% to 53,677. Nasdaq technology shares remained comparatively subdued following the previous day’s semiconductor selloff, with Nasdaq 100 futures around 29,620, up approximately 0.12%. On Tuesday, the Nasdaq 100 had fallen 1.68% as chip and AI-related shares came under pressure.
Asian markets were considerably weaker. Japan’s Nikkei 225 fell 3.16% to 65,326.42, while South Korea’s KOSPI dropped 5.8% as semiconductor shares sold off sharply. China’s Shanghai Composite fell 2.4%. By contrast, Hong Kong’s Hang Seng edged 0.09% higher to 25,495.07.

Market drivers

Long-term government bond yields have been one of the biggest forces affecting markets. US 30-year Treasury yields briefly reached around 5.32%, while UK and European long-term borrowing costs also moved sharply higher. Concerns include inflation, government borrowing and the amount of capital required to finance major AI infrastructure projects.

The US Treasury subsequently announced that it would at least double its long-dated bond buyback programme, helping push the 30-year Treasury yield back towards 5.19% and providing some relief to global equities.

Technology shares have also been under pressure. A US semiconductor index fell around 5% on Tuesday before losses spread into Asian markets. At the same time, healthcare shares surged after Moderna reported positive Phase 3 data for its personalised melanoma vaccine developed alongside Merck, sending Moderna shares sharply higher.

Currencies

Sterling strengthened against the US dollar, with GBP/USD at approximately $1.3606, up 0.55% on the day.

Against the euro, sterling was worth approximately €1.17, based on EUR/GBP trading around 0.8569.

The wider US dollar weakened sharply after the Treasury’s bond-buyback announcement, with the Dollar Index down around 0.75%.

Commodities

Energy prices remained elevated as geopolitical risk continued to be priced into markets.

Brent crude was around $92.08 a barrel, up 1.14%, while WTI crude traded near $86.21, up 1.50%. Continued uncertainty around Iran, the UAE and shipping through the Strait of Hormuz remained the main driver.

Gold also rose strongly, gaining approximately 3.47% to $4,484.86 an ounce, benefiting from both safe-haven demand and the weaker dollar.

For UK business owners, the key market message is that energy, financing and geopolitical risks remain closely linked. Higher oil prices can raise operating costs and inflation, while higher bond yields can keep borrowing expensive even if shorter-term central-bank interest rates remain unchanged.

Insolvency Watch

Administrations (3)

• AVON COMBINED ELECTRICAL SERVICES LIMITED
• WEMMS EDUCATION UNLIMITED LIMITED
• YORKSHIRE ENERGY SYSTEMS LTD

Liquidations (13)

• ASTRODENE LIMITED
• AYSGARTH SCHOOL TRUST LIMITED
• CAPVEST ASSOCIATES LLP
• CAPVEST LIMITED
• CONVERSE7 LTD.
• CREDIT DATA RESEARCH LIMITED
• CRONGAN HOLDINGS LIMITED
• ENERGY PARK LIMITED
• HUNTER UP 1 LIMITED
• K P I SERVICES LTD.
• PAVILLION MORTGAGES 2022-1 PLC
• PDW NOMINEE CO LIMITED
• QUEST FINANCIAL ASSOCIATES LIMITED

Winding-up Petitions (2)

• COASTAL BUILDERS (SUSSEX) LIMITED
• LAYGATE EVENTS LTD

Protecting cashflow as costs rise again

Today’s combination of higher inflation, expensive borrowing and continuing insolvency pressure makes strong credit control particularly important.

Businesses selling on credit cannot control insolvency rates, energy prices, interest rates or geopolitical events, but they can control how much risk they accept and how quickly they respond when payment behaviour changes.

CPA’s CreditCare reports can help Members check businesses before granting or increasing credit. Ongoing debtor monitoring can help identify changes in financial circumstances, while structured credit-control support and overdue account recovery can prevent unpaid invoices from quietly becoming bad debts.

Early action matters. A customer that begins paying increasingly late may simply be experiencing a temporary problem, but repeated delays can also be an early sign of deteriorating cashflow. CPA’s approach is designed to improve payment performance while treating customers professionally and preserving valuable commercial relationships.

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.

Open this guide in a new tab

.