UK Business News Today: 2 July 2026 | Economy, Markets & Insolvencies

UK SMEs face another mixed day of relief and risk. Falling fuel prices may ease delivery and operating costs, but business confidence has dropped to its weakest level in four years, hospitality firms are warning of closures, manufacturers face tax and demand pressures, and interest rates are expected to remain on hold. For businesses that sell on credit, today’s news points to a familiar challenge: costs may be easing in some areas, but customer payment behaviour, insolvency risk and cashflow discipline remain critical.

James Salmon, Operations Director.

Key Developments

• UK business confidence has fallen to its lowest level in four years, with uncertainty weighing on investment and growth.
• Diesel prices saw their fastest monthly fall since 2000, offering some relief to transport-heavy firms.
• Hospitality bodies warn that one in six businesses could close within a year without urgent VAT support.
• The Bank of England is expected to hold interest rates at 3.75%, keeping borrowing costs elevated.
• England’s late World Cup win may lift consumer mood, but a 1am Monday kick-off against Mexico could leave workplaces tired at the start of next week.

Economy & Policy

UK business confidence hits four-year low

UK business confidence has fallen to its lowest level in four years, according to the ICAEW Business Confidence Monitor. The index recorded a score of minus 14.6 for the second quarter, marking six consecutive quarters of negative readings. ICAEW chief Alan Vallance said the war in Iran had damaged confidence and that the economic consequences were proving difficult to shake off. He urged the next Prime Minister to focus on creating conditions for business growth.

Why it matters: Low confidence can delay investment, hiring and supplier payments, increasing the risk that businesses stretch payment terms to preserve cash.

Bank of England expected to hold rates at 3.75%

Bank of England Governor Andrew Bailey has signalled that interest rates are likely to remain on hold later this month. Speaking in Portugal, he said expectations of rate cuts this year were “off the table” in March and remained off the table now. He pointed to a softening economy and the risk of second-round effects from recent energy cost pressures. For SMEs, this suggests borrowing costs may remain elevated for longer.

House prices stall as mortgage rates rise

House prices were unchanged in June, according to Nationwide, with the average UK home valued at £277,484. The ongoing Middle East conflict has pushed mortgage rates higher, with the average two-year fixed rate reported at 5.53%. Economists expect house prices to remain broadly flat in the coming months, although a later recovery is possible if rates fall back. A subdued housing market can affect confidence across construction, home improvement, retail and professional services.

Households build buffers but struggle to grow wealth

British households have built stronger financial buffers, according to the Barclays Financial Confidence Index. The average adult can now cover essential costs for seven months, but 59% of income is still going on essentials. Barclays UK chief executive Vim Maru said resilience had improved, but many people remained hesitant to make financial decisions. Nearly a quarter of households are delaying financial action because of economic uncertainty.

Andy Burnham urged to embrace economic populism

Andy Burnham is being advised to adopt an “economic populist” strategy if he becomes Prime Minister. Research from Persuasion UK suggests policies such as rent controls and higher taxes on wealth could help Labour win a majority at the next election. The polling indicates Labour could reach 34% of the vote and 358 seats under a more radical platform. However, continuing on its current trajectory could see Labour fall to 95 seats, its lowest level since 1918.

Labour kicks defence funding decisions down the road

Experts have warned that the next UK Government will face difficult choices on defence funding. The Defence Investment Plan suggests defence spending will reach only 2.7% of GDP by 2029, leaving the next administration to accelerate spending to meet the NATO commitment of 3.5% by 2035. The Institute for Fiscal Studies estimates that an extra £25bn a year may be required, equivalent to a 3p rise in income tax. The Government has also yet to clarify how it will address a £4.7bn shortfall in the current plan.

Tax & Government

Hospitality industry says VAT cut is now urgent

Hospitality trade bodies are calling for urgent VAT relief after new figures suggested one in six UK hospitality businesses could close within a year. A survey by UKHospitality and other groups found that 23% of hospitality businesses are operating at a loss, up from 15% three months ago. Around 5% said their business was no longer viable. Chef and campaigner Tom Kerridge is calling for hospitality VAT to be cut to 10%, bringing the UK closer to European levels.

Tax rises claim 89-year-old bakery

Coughlans Bakery, an 89-year-old family business partly owned by comedian Romesh Ranganathan, has entered voluntary liquidation. Managing director Sean Coughlan cited rising National Insurance costs and business rates, which he said added £20,000 a week to the bakery’s costs. He also pointed to energy prices and the recent heatwave, which reduced sales. The liquidation is intended to settle debts with employees and suppliers.

Factory jobs at risk over bottle tax

The GMB union has warned that Labour’s new bottle tax could put 4,750 UK manufacturing jobs at risk. The packaging levy, part of the extended producer responsibility regime, increases costs for glassmakers and may make overseas production more attractive. The British Beer and Pub Association says the tax could add £124m a year to the beer sector. Labour MP Sarah Champion described the policy as “wholly unworkable and ultimately counter-productive” in its current form.

Lloyds to scrap Halifax brand after 173 years

Lloyds Banking Group is scrapping the Halifax brand after 173 years, with customer accounts to be rebranded to Lloyds. Halifax branches will either be rebranded or moved to nearby Lloyds branches during 2027, although no job cuts are being announced as part of the change. Lloyds said customers would retain their app design, branch staff, sort codes and account numbers. Local politicians described the decision as disappointing given Halifax’s long history and identity in West Yorkshire.

SME & Business Environment

Diesel prices see fastest monthly fall since 2000

UK motorists saw the fastest monthly fall in diesel prices since 2000 in June, according to the RAC. The average diesel price fell from 183.75p a litre to 167.14p, while petrol dropped from 159.37p to 151.40p. The fall followed easing oil prices after the US and Iran agreed a framework deal to end the fighting, with Brent crude returning close to pre-war levels. The RAC said fuel prices are still some way above where they were before the conflict began.

Fresh heat alert issued for parts of England

A yellow heat health alert has been issued for London, the South East, South West, East of England and East Midlands from Saturday lunchtime until Wednesday evening. Temperatures are expected to climb above 30C in parts of southern England after last week’s record-breaking June heatwave. The UKHSA warned of higher risks to older people, young children and those with underlying health conditions. Hospitals, GP surgeries and care services may face higher demand, while water-related emergencies may also increase.

England win sets up 1am Monday clash with Mexico

England came from behind to beat DR Congo 2-1 in the World Cup round of 32, with Harry Kane scoring twice in the second half. The result sends England into a last-16 match against co-hosts Mexico in Mexico City. The match is scheduled for 1am UK time on Monday, raising the prospect of tired staff and subdued productivity at the start of next week. The United States also advanced after beating Bosnia and Herzegovina 2-0, while Belgium came from two goals down to beat Senegal 3-2.

Industry & Investment

Manufacturing output grows but momentum may fade

Manufacturing output grew at its fastest pace in 21 months, according to S&P Global. The manufacturing PMI registered 52.5 in June, down from May’s four-year record high, as firms stockpiled goods to hedge against Middle East trade disruption. Production levels increased despite slower growth in new orders. Researchers warned that the expansionary momentum could fade later this year, while Make UK chief Stephen Phipson urged the next Prime Minister to restore competitiveness and unlock investment.

North Sea drilling could unlock £7bn investment

Labour could unlock £7bn of North Sea investment by reopening the sector to new drilling, according to Wood Mackenzie. The consultancy argued that a supportive political climate could attract capital and unlock millions of barrels of oil. By contrast, a stricter regulatory approach could risk £11bn in lost investment. The issue highlights the tension between energy security, investment, environmental policy and industrial competitiveness.

SGE plans £35bn UK small nuclear reactor fleet

SGE SA, backed by Polish billionaire Michal Solowow, is planning a £35bn fleet of small nuclear plants in the UK. The company has submitted an application under the UK’s Advanced Nuclear Framework to build 14 units across three sites. The reactors would use GE Vernova Hitachi BWRX-300 small modular reactor technology, with Google Cloud and Samsung C&T among the deployment team. The fleet could generate 4.2GW, more than 10% of UK electricity, with first units expected in 2034.

Meta’s AI cloud pivot sparks market reaction

Meta’s share price rose 9% after reports that it is starting a cloud-computing business to sell surplus data-centre capacity. The company is expected to spend $145bn on AI infrastructure this year as it competes in the artificial intelligence race. Selling surplus capacity could help defray some of that cost. The move also prompted wider questions in markets about AI infrastructure demand and whether some capacity may have been overbuilt.

International & Trade

US shifts away from long-term USMCA renewal

The Trump administration said it would not renew America’s trade pact with Canada and Mexico for another 16 years. Instead, it plans to pursue separate deals with its neighbours. The agreement will now be reviewed annually until it expires in 2036, unless one of the countries withdraws. The move adds uncertainty for North American supply chains.

Trump dismisses criticism over crypto profits

Donald Trump has dismissed criticism of his cryptocurrency profits after financial disclosures reportedly showed he earned more than $1bn from crypto ventures last year. The profits were driven by sales of his $TRUMP meme coin and deals linked to his family’s crypto firm, World Liberty Financial. Trump denied a conflict of interest, saying external institutions run his finances. The issue adds to wider debate about political influence, deregulation and digital assets.

Mervyn King to co-chair Federal Reserve communications task force

Federal Reserve Chairman Kevin Warsh has appointed former Bank of England Governor Mervyn King to co-chair the Fed’s new communications task force. The group will review how the US central bank communicates with investors and the public, including how policymakers signal the outlook for monetary policy. The Fed is also reviewing its balance sheet and inflation frameworks. Conclusions are expected by year-end.

Global Market Summary

Global markets were dominated by a sharp rotation away from technology and semiconductor stocks, while lower oil prices offered some relief for inflation-sensitive businesses. The supplied market briefing showed European equities finishing modestly lower on Wednesday, US markets closing mixed, and Asian markets selling off sharply overnight as AI infrastructure concerns spread through chip-related shares.

Equities

The FTSE 100 was indicated around 0.3% lower in futures trading, while the FTSE 250 gained 1.4% during the previous session. Sterling strengthened slightly against the dollar, offering some support to UK-focused assets. Greggs shares fell after its CFO announced a departure, while AB Foods reported stronger-than-expected third-quarter retail revenue.

The STOXX Europe 600 fell around 0.4%, while the STOXX Europe 50 also edged lower. The DAX slipped modestly and the CAC 40 dropped around 0.8%, weighed down by energy, utilities, telecoms and technology. Defence stocks were an exception after the UK committed an additional £15bn to overhaul the British military, helping lift names including Rheinmetall, Babcock, Leonardo, Rolls-Royce and Safran.

In the US, the S&P 500 closed 0.2% lower at 7,483.23, while the Nasdaq 100 fell 1.5%. Semiconductor shares were the main source of pressure, with Micron Technology down 10.6% and Corning down 13.6%, while financials outperformed as investors rotated away from chip stocks.

Asian markets were hit harder overnight. The Nikkei 225 fell 2.5% to 68,733, dragged lower by semiconductor names including Kioxia, Advantest and Disco. The Hang Seng fell around 0.6%, although JD Logistics rose 6%. South Korea’s Kospi fell around 8%, with SK Hynix and Samsung Electronics under heavy pressure, while China’s Shanghai Composite fell 2.0% to 4,028.90 and the Shenzhen Component lost 3.9%.

Market drivers

The main market driver was concern that the AI infrastructure boom may be entering a more uncertain phase. Reports that Meta plans to sell excess AI compute capacity as a cloud service raised questions about whether demand for chips and data-centre capacity had been overestimated. That hurt US chip stocks and then spread into Asian semiconductor markets.

Apple’s reported interest in buying memory chips from Chinese manufacturers added to pressure on Korean and Japanese chipmakers. Investors also watched Federal Reserve commentary, with Kevin Warsh saying inflation risks had eased while reaffirming the 2% target. That was interpreted as less hawkish than feared.

UK defence spending helped European defence stocks, while eurozone inflation slowing to 2.8% supported expectations of easier ECB policy. US payrolls were due later in the day and remained a key focus for investors.

Currencies

Sterling was the strongest G10 currency against the dollar on Wednesday, with GBP/USD (1.334) rising as the dollar weakened more broadly. The pound also gained against the euro, with GBP/EUR improving (1.169) as EUR/GBP fell to around 0.8566, a four-day low for the euro.

The yen remained under pressure near multi-decade lows, with USD/JPY around 161.60 after a brief yen rally on intervention speculation. Japanese authorities remain on alert, and South Korean officials are reportedly in close communication with the US and Japan on foreign exchange issues.

For UK SMEs, a stronger pound can reduce some import costs, but currency volatility remains a concern for businesses buying goods, raw materials or technology from overseas.

Commodities

Brent crude fell below $71 a barrel, its third consecutive decline and the lowest level since before the Iran war. WTI crude traded around $68 a barrel. The fall reflected improving Hormuz flows, progress in US-Iran talks and expectations that the oil market may move back toward oversupply as the conflict impact fades.

European gas remained stickier, with TTF prices above €43/MWh, partly because LNG flows through Hormuz had not fully normalised. Gold rose to around $4,080 an ounce, gaining as less hawkish Fed commentary reduced rate-hike fears.

For business owners, lower oil prices are welcome, especially for transport, logistics and energy-intensive firms. However, gas prices and currency movements mean cost relief may remain uneven.

Insolvency Watch

Administrations (12)

• 40 STATION ROAD LTD
• ACCULABS DIAGNOSTICS UK LIMITED
• BUSINESS RATES HUB LIMITED
• FAST-FORM SYSTEMS LTD
• FENCHURCH SPV 2 LIMITED
• GMP PROPERTY HOLDINGS LTD
• HODSON DEVELOPMENTS (CG THREE) LIMITED
• ISOSCELES DM 123 LIMITED
• REGENCY FACTORS LIMITED
• REGENCY TRADE FINANCE LIMITED
• THE IMPULSE GROUP LIMITED
• VEDA FURNISHINGS LTD

Liquidations (20)

• AM&SY LIMITED
• CONTINENTAL CRAYFISH LIMITED
• CORDELZA LIMITED
• D W J METALS LIMITED
• E A BRIGGS LIMITED
• EGL HOLDINGS LIMITED
• EMPTY BILLY LIMITED
• GREENSTONE CAPITAL LLP
• GROVE PROPERTIES (MERCIAN) LIMITED
• HISLOP IT SOLUTIONS LIMITED
• J. L. EDWARDS & SONS LIMITED
• JLS ASSOCIATES INDEPENDENT FINANCIAL ADVISERS LIMITED
• L K D CONSULTANCY LTD
• LARMAC (PROJECTS) LIMITED
• MERCURY TECHNOLOGY GROUP, LTD.
• MUIRHALL CONSTRUCTION LIMITED
• T W FINANCIAL PLANNING LTD
• THE DIVERSE INCOME TRUST PLC
• TIPPERTY HOLDINGS LIMITED
• VOLARE R&D LIMITED

Winding-up Petitions (22)

• A1 PROPERTIES (SUNDERLAND) LTD
• AK & GK DESIGN & BUILD LTD
• CHELTENHAM MOWERS LIMITED
• CIAS BUILDING SERVICES LTD
• COFFI CO (CARDIFF) LTD
• CRYSTAL JOHNSTON LIMITED
• DRINKSONE LTD
• ELECTRICALL SERVICES LTD
• FLINT ENERGY LTD
• GARDANT SECURITY LIMITED
• GREGARIOUS LIMITED
• KIBOSH LTD.
• MING FOODS LIMITED
• PCS CONTRACTING LTD
• RALTEC ARC LTD
• SIMO MEATS UK LTD
• STOCKBRIDGE CAPITAL LIMITED
• SUPERIOR ECO LIGHTING SYSTEMS LIMITED
• TACHMED HEALTHCARE LTD
• THE COURTYARD & MARKET TRADING CO. LTD
• VANTAGE GROUP NE LTD
• VIVA ITALIA LTD

Winding-up Orders (2)

• AK & GK DESIGN & BUILD LTD
• CHELTENHAM MOWERS LIMITED

Keeping cash moving when confidence is low

Today’s news shows why credit control must stay active even when some costs are easing. Lower fuel prices may help, but weak business confidence, hospitality closures, manufacturing pressure, higher borrowing costs and fresh insolvency notices all point to a trading environment where payment behaviour can deteriorate quickly.

CPA helps businesses protect cashflow without damaging customer relationships. Through CreditCare credit reports, debtor monitoring, overdue account recovery and practical credit control support, CPA gives businesses clearer visibility over risk before invoices become harder to recover.

When customers start paying later, early action matters. A structured, respectful credit control process can improve payment performance, reduce internal admin pressure and help preserve commercial goodwill.

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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