UK Business News Today: 19 May 2026 | Economy, Markets & Insolvencies
The Government’s proposed crackdown on late payments dominated UK business news today as ministers unveiled plans to cap payment terms and strengthen enforcement powers against large firms delaying payments to SMEs. The announcement came against a backdrop of weakening employment data, rising political uncertainty and growing concerns over the economic impact of higher energy prices linked to the Iran conflict.
Labour market figures showed the sharpest monthly decline in UK payroll employment since the pandemic, while youth unemployment and economic inactivity continue to rise. Markets stabilised slightly after hopes emerged of a pause in US-Iran tensions, though investors remain nervous about inflation, public finances and the wider economic outlook.
James Salmon, Operations Director.
Key Developments
• Government unveils major late payment crackdown for SMEs
• UK employers cut 100,000 jobs in April
• IMF warns over UK spending pressures and inflation risks
• Youth unemployment and AI job fears continue to rise
• Insolvency notices remain elevated across multiple sectors
SME & Business Environment
Government unveils tougher crackdown on late payments to SMEs
The Government is introducing a new Commercial Payments Bill aimed at tackling the UK’s persistent late payment problem, which ministers say contributes to 38 business closures every day and costs the economy around £11bn annually. Under the proposals, large companies will face a maximum 60-day payment term, while overdue invoices will automatically incur interest at 8% above the Bank of England base rate.
Business Secretary Peter Kyle said the measures followed “considerable, exhaustive consultation” and confirmed that the Small Business Commissioner will receive stronger enforcement powers, including the ability to investigate firms and issue fines potentially exceeding £10m for repeated abuses. The reforms represent one of the most significant attempts in years to strengthen payment protections for smaller suppliers.
Business rates appeal delays add pressure for retailers and hospitality firms
Small business groups have warned that lengthy delays in the business rates appeals process are placing additional financial strain on pubs, restaurants and independent retailers already battling rising costs and weaker consumer demand. Around 40,000 appeals are reportedly waiting to be processed by the Valuation Office Agency, with average waiting times of 11 months and some cases taking considerably longer.
Trade bodies including UKHospitality, the Federation of Small Businesses and the Booksellers Association said many firms are being forced to continue paying disputed rates while appeals remain unresolved, creating further cashflow pressure at a difficult time for the high street. HMRC said most disputes are resolved early and improvements to processing times are being implemented.
Cyberattacks cost UK businesses billions in legal and operational damage
Large UK companies suffered an estimated £11.7bn in losses linked to cyberattacks last year, including £3.7bn in legal costs arising from shareholder lawsuits, according to research from Gallagher and the Centre for Economics and Business Research. Direct trading disruptions accounted for around £5.4bn of the total losses, while businesses also spent heavily on external advisers and internal response teams.
Gallagher’s Laura Parris warned that the financial and reputational consequences of cyber incidents can continue for months after the original breach. The figures underline growing concerns around operational resilience, insurance costs and reputational risk as cyber threats become more frequent and more expensive for UK businesses.
Economy & Policy
UK job losses accelerate sharply as businesses cut back hiring
UK employers cut 100,000 payrolled jobs in April, the largest monthly decline since the start of the pandemic and far worse than economists’ expectations for a 10,000 fall. Retail accounted for much of the decline as businesses faced rising energy costs, weaker confidence and mounting uncertainty linked to the Iran conflict. The Office for National Statistics warned the figures may later be revised due to incomplete tax-year reporting, but the broader trend points to a rapidly weakening labour market.
Unemployment rose to 5.0% in the three months to March, while vacancies dropped to a five-year low of 705,000. Youth unemployment climbed to 16.2%, its highest level since 2015, adding to concerns over the outlook for younger workers. Wage growth continued to slow, with regular pay rising 3.4%, while real wage growth weakened to just 0.3%.
Economists said geopolitical tensions, higher energy prices and domestic political uncertainty are all weighing on business hiring decisions. The figures also place renewed pressure on the Government after employers linked recent payroll tax increases and minimum wage rises to worsening employment conditions.
IMF calls for tax reforms and rethink of pension spending commitments
The International Monetary Fund has urged Chancellor Rachel Reeves to reconsider key areas of public spending and prepare contingency tax measures to keep public debt under control. In its latest assessment, the IMF questioned the Government’s reliance on ambitious efficiency savings and suggested reforms including broadening the VAT base, updating property taxes and reconsidering the long-term affordability of the state pension triple lock.
The IMF recommended linking pensions more closely to inflation rather than maintaining the current triple-lock system. While the Fund upgraded its UK growth forecast for 2026 to 1%, it warned that the Iran conflict, rising energy costs and domestic political uncertainty could still weaken growth and push inflation higher later this year.
IMF cuts UK growth outlook and warns on inflation and political uncertainty
The IMF expects UK economic growth of 1% in 2026, with CPI inflation forecast to peak at 3.9% by year-end. The Fund also warned that risks remain elevated due to domestic uncertainty and recent political developments.
Rising pension and healthcare costs intensify pressure on public finances
Government spending on older people and healthcare has risen sharply over the past three decades, according to new Office for National Statistics data. Total public spending increased from 36.9% of GDP in 1995 to 46% in 2024, while spending on old age alone rose from 6.5% to 8.5% of GDP. Healthcare spending also climbed significantly over the same period, rising from 4.9% to 8.8% of GDP.
The Office for Budget Responsibility has warned that the current triple-lock pension system may prove financially unsustainable, with pension-related spending projected to reach £196.2bn by 2031.
Burnham backs fiscal rules as markets watch Labour leadership speculation
Greater Manchester Mayor Andy Burnham has said he would maintain the Government’s fiscal rules if he were ever to become Prime Minister, including keeping defence spending within existing borrowing constraints. The statement came after speculation over Burnham’s potential leadership ambitions contributed to a rise in UK bond yields late last week as investors assessed the possibility of future policy shifts.
Burnham’s intervention appeared designed to reassure financial markets that there would be no major loosening of public spending discipline under his leadership.
Employment & Labour
Fewer young people in work as employment crisis deepens
The proportion of 16 to 24-year-olds in payrolled employment has fallen to just 50.6%, according to analysis by the Institute for Fiscal Studies, highlighting growing concern over the state of the UK labour market for younger workers. The IFS said rising employment costs, worsening mental health and the growing use of artificial intelligence are all contributing to weaker hiring demand and reduced opportunities for young people entering the workforce.
Nearly one million young people are now classified as NEETs — not in education, employment or training — with the figure rising sharply in recent months.
Graduate unemployment concerns grow as youth joblessness rises
A new report by former minister Alan Milburn warns that growing numbers of university graduates are being left outside the workforce despite holding qualifications. The study found that 10.6% of young people classified as not in employment, education or training now hold degrees, while nearly 957,000 people aged 16 to 24 fall into the broader Neet category.
Milburn criticised what he described as an overemphasis on university funding at the expense of vocational training and further education.
Economists warn AI could create major tax and employment shock
Tax experts are warning that rapid advances in artificial intelligence could severely disrupt government finances by reducing employment and shrinking income tax receipts. Arun Advani of the Centre for the Analysis of Taxation said AI’s impact on tax revenues could become visible within five years, while Monzo founder Tom Blomfield recently warned AI could “wipe out” income tax revenues by the early 2030s.
Separate research from King’s College London found growing concern among younger people about the social impact of AI, with one in three students believing job losses linked to AI could become severe enough to trigger civil unrest.
Industry & Investment
Currys profits beat expectations as retailer gains market share
Currys said annual profits will come in ahead of guidance after stronger-than-expected trading across both its UK and Nordic operations. The electricals retailer expects adjusted pre-tax profit of around £191m for the year to 2 May, up 18% on the previous year and above its recently upgraded guidance range of £180m to £190m.
The update suggests consumers are still spending selectively on technology and household electronics despite wider economic pressures.
Dr Martens returns to profit growth as discounting reduced
Dr Martens reported a return to profit growth after cutting discounting and focusing on higher-quality sales as part of its turnaround strategy. Adjusted pre-tax profit rose 61% to £55m in the year to 29 March, although revenues slipped 2.9% to £764.9m.
The bootmaker improved gross margins to 66.2% from 65.0% after reducing clearance activity across both stores and wholesale operations.
NCP caught in major debt battle as restructuring pressures continue
National Car Parks, the UK’s largest car park operator, is facing a £37m debt dispute with Japanese investor Park24 after administrators from PwC were appointed earlier this year. The company has struggled with weaker post-pandemic demand, inflationary pressures and falling profitability, while revenues remain below pre-Covid levels.
Administrators are continuing efforts to sell parts of the business after 29 leased sites were closed, while unsecured creditors are owed around £216m.
Elon Musk loses key court battle against OpenAI over profit shift claims
A jury has rejected Elon Musk’s claims that OpenAI abandoned its original mission to develop artificial intelligence for the benefit of humanity after transitioning toward a for-profit structure. Jurors found that Musk had waited too long to bring the case and therefore did not rule on the substance of his allegations.
The decision is viewed as an important victory for OpenAI as it reportedly explores a potential future stock market listing.
Tax & Government
Scottish Power takes tax dispute with HMRC to Supreme Court
Scottish Power is challenging HMRC in the UK Supreme Court over whether it can claim tax relief on a £28m payment linked to an Ofgem investigation into its conduct between 2013 and 2016. The company paid the money to consumers and organisations as part of a settlement with the regulator but HMRC ruled that the payment could not be deducted from taxable profits.
The outcome of the case could have wider implications for how regulatory penalties and settlement payments are treated for tax purposes across heavily regulated industries.
Businessman criticised after AI-generated fake legal cases submitted in HMRC dispute
A former restaurateur, Omar Rafique, avoided being held in contempt of court after submitting AI-generated legal material during a £51,000 tax dispute with HMRC. The First-tier Tribunal found that his filings contained fabricated case citations and multiple factual inaccuracies produced by artificial intelligence tools.
Judge Biley warned that while there is “no bar” on using AI in legal preparation, all parties remain responsible for ensuring submissions are accurate and truthful.
Why it matters: Businesses using AI tools in legal or financial work still remain fully responsible for accuracy and compliance.
Questions raised over funding of Nigel Farage’s £1.4m property
Nigel Farage is facing renewed scrutiny over how his £1.4m home purchase was financed following analysis of company accounts linked to his business interests. Farage has said the property was bought using earnings from his appearance on ITV’s I’m A Celebrity… Get Me Out Of Here, but a Financial Times review reportedly raised questions over whether the figures support that explanation.
Shakira wins major court victory in long-running tax dispute
Singer Shakira has won a significant legal battle against Spain’s tax authority after a court ruled that fines imposed over her 2011 tax status were invalid. The court found the authorities failed to prove she spent more than 183 days in Spain during the year in question, leading to a refund worth more than €55m.
Global Market Summary
Global markets stabilised somewhat on Tuesday after several days of sharp volatility driven by fears surrounding the Iran conflict and the Strait of Hormuz. Investors were encouraged by reports that President Trump had paused planned military strikes against Iran, raising hopes of a possible diplomatic breakthrough.
In Europe, the FTSE 100 traded around 10,384, while the STOXX Europe 600 rose to 614.23. Germany’s DAX stood near 24,556 and France’s CAC 40 traded around 8,042. European equities benefited from falling bond yields and slightly weaker oil prices, although sentiment remains fragile.
US markets closed mixed overnight. The S&P 500 finished around 7,403 while the Dow Jones held near 49,686. The Nasdaq underperformed as technology and semiconductor shares weakened, with investors continuing to reassess AI valuations and interest-rate expectations.
Asian markets delivered mixed performances overnight. Japan’s Nikkei 225 slipped 0.4% to 60,550 despite stronger GDP data, while Hong Kong’s Hang Seng rose 0.5% and China’s Shanghai Composite gained 0.9%. South Korea’s KOSPI fell sharply as higher oil prices fuelled inflation concerns.
Sterling weakened following poor UK labour market data, trading around $1.3398 against the dollar. GBP/EUR remained around 1.15, while the stronger US dollar reflected ongoing demand for safe-haven assets amid geopolitical tensions.
Oil prices remained elevated despite easing slightly from recent highs. Brent crude traded around $110.35 per barrel while WTI crude stood near $108.00. Gold slipped modestly to around $4,542 per ounce but remained close to historic highs as investors continued seeking defensive assets.
UK government bonds recovered modestly, with the 5-year gilt yield falling to 4.64% and the 10-year yield easing to 5.11%. Investors interpreted the pause in Middle East tensions as slightly reducing the immediate inflation threat posed by surging energy prices.
Insolvency Watch
Administrations (8)
• ABSOLUTE POST LIMITED
• CASTLE DONNINGTON LIMITED
• COMM COMMERCIAL CONTRACTORS LTD
• DEVONSHIRE PARK HOTEL HOLDINGS LIMITED
• NORTH WEST PRECISION LIMITED
• OCEAN VIEWS RESIDENCE LTD
• PURPOSE LED SUCCESS MODELLING LTD
• STAINLESS STEEL VESSELS LIMITED
• XL SCAFFOLDING LIMITED
• ZENITH AVIATION LIMITED
Liquidations (6)
• DRUM FORTH LIMITED
• H J HILL SETTLEMENT LIMITED
• HOPE VALLEY HOLDINGS LIMITED
• M HILLESS STONE SUPPLIES LIMITED
• M.K.L. PROPERTIES LTD.
• M.S.T. PROPERTY LIMITED
• SHEFFIELD INTERNATIONAL VENUES LIMITED
• THE BATHING MACHINE LIMITED
Winding-up Petitions (9)
• ANSON GOLDSMITH LIMITED
• ECU HOLDINGS LIMITED
• GEOPROVIDER PROCESSING LTD
• GREEKFOODSCOT LTD
• LASTLAWN PROJECTS LTD
• LONGSHINE OVERSEAS LIMITED
• MERLOT MANOR LIMITED
• TKNW1 LTD
• UK SINOSIA BUSINESS LIMITED
• YANKEL INTERMODAL LOGISTICS LTD
What CPA can do for you
Late payments, rising insolvencies and weakening business confidence continue creating serious cashflow pressure for SMEs across the UK. In uncertain economic conditions, early action becomes even more important.
CPA helps businesses protect cashflow through CreditCare reports, debtor monitoring, overdue account recovery and ethical credit management support designed to maintain customer relationships while improving payment performance.
If your customers are taking longer to pay, or you are concerned about rising financial risks within your sector, speak to 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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