UK Business News Today: 20 August 2026 | Economy, Markets & Insolvencies

UK businesses face another reminder today that falling inflation cannot be taken for granted. Consumer price inflation rose to 2.9% in July as energy costs increased, with further rises in household bills expected this autumn and economists warning that inflation could approach 3.5%. Consumer confidence is improving, but businesses still face pressure from costs, taxes and borrowing conditions, while a major report warns that climate disruption could eventually cost London as much as £36 billion a year. For SMEs selling on credit, the combination reinforces the need to monitor customers carefully, protect margins and act promptly when payment behaviour begins to deteriorate.

James Salmon, Operations Director.

Key Developments

• UK inflation rose from 2.6% to 2.9% in July, with energy costs a major driver and economists warning of further increases.
• Household energy bills are forecast to rise another 4% in October despite the planned removal of VAT from electricity.
• Consumer confidence improved sharply in August, providing some encouragement for retailers and other consumer-facing businesses.
• London could lose as much as £36 billion of economic output annually by the 2050s because of climate-related disruption.
• Global markets remain sensitive to higher oil prices, government borrowing and interest-rate expectations, while US federal debt has passed $40 trillion.

Economy & Policy

UK inflation rises to 2.9% as energy costs climb

UK CPI inflation increased to 2.9% in July from 2.6% in June, reaching its highest level in four months. The increase was broadly in line with market expectations but slightly above the Bank of England’s July projection of 2.8%. Energy costs were a major contributor, with the household energy price cap rising 13% and gas prices affected by the continuing Middle East conflict. KPMG chief economist Yael Selfin expects inflation to rise gradually towards around 3.5%, while ICAEW chief economist Suren Thiru warned that inflation could become one of the biggest threats to UK growth in the months ahead.

The underlying picture also remains uncomfortable for policymakers. Measures of domestic inflation remain sticky and energy prices are tracking above the Bank of England’s previous assumptions. That leaves the possibility of another rate increase on the table, although a weaker labour market and limited evidence of energy costs feeding into wider domestic prices could ultimately keep Bank Rate unchanged through the rest of 2026.

Consumer confidence climbs from recent lows

Consumer sentiment improved noticeably in August, according to the British Retail Consortium. Its confidence index rose eight points to -28, with younger consumers particularly optimistic about their personal finances and future spending. BRC chief executive Helen Dickinson said confidence in the economy had reached its highest level since the lows recorded at the start of the Iran conflict.

The separate GfK consumer confidence measure also improved strongly in July, rising at its fastest pace since November 2023. Sentiment nevertheless remains negative overall, meaning the improvement should be viewed as a recovery from weak levels rather than a return to widespread optimism.

House prices rise 2%, but momentum slows

The average British home increased in value by around £5,000 in the year to June, according to Land Registry data, representing annual growth of 2%. That was weaker than the annual increases recorded in April and May, while prices rose just 0.1% between May and June.

Regional differences remain substantial. Prices increased 4.7% in North West England and 4.3% in the North East, while London prices fell 2.5% over the year. Westminster recorded a particularly steep annual decline of 25.4%.

Energy & Costs

Household energy prices expected to rise again in October

Cornwall Insight expects the energy price cap to increase by a further 4% in October, taking household energy costs to their highest level since July 2023. The forecast rise comes despite the government’s plan to remove VAT from electricity bills from October.

Energy has again become an important inflationary risk because of disruption associated with the Middle East conflict. Higher household bills reduce disposable income, while companies can face increases through their own energy contracts and through higher costs passed on by suppliers.

Climate change could cost London £36bn a year

Climate change could reduce London’s economic output by as much as £36 billion annually by the 2050s, according to a report published by the Mayor of London and the capital’s councils. Lost working hours, disruption to businesses and damage to infrastructure during extreme weather are among the risks identified.

Businesses are being encouraged to adapt through measures including flexible working hours, home working during extreme conditions and relaxed clothing requirements during heatwaves. Authorities also plan to improve parks, promote public cooling spaces, widen access to drinking water and public toilets, and increase shading. Transport for London has been urged to improve cooling on the Underground and introduce air conditioning on new trains.

Tax & Government

Salary sacrifice cap expected to raise £468m in additional National Insurance

The Treasury is expected to collect an additional £468 million annually in National Insurance contributions following the introduction of a £2,000 annual cap on salary sacrifice arrangements. Around 4.3 million workers are expected to remain unaffected, while those caught by the restriction are forecast to pay approximately £84 more on average.

Employers may also face additional costs, raising concerns that some of the burden could eventually be reflected in salaries. HMRC expects more than 2.8 million people to reduce pension contributions as a result. The Treasury estimates the wider package will raise around £4.8 billion when additional income tax receipts are included.

HMRC confirms Making Tax Digital exemptions

HMRC has confirmed that some self-employed people and landlords can receive exemptions from Making Tax Digital where they cannot reasonably use digital technology. Grounds can include age, disability, lack of reliable internet access or religious beliefs.

Around 6,500 exemption applications have been submitted, with almost 5,000 approved. Tax specialists have warned that HMRC will need to balance legitimate accessibility requirements against the possibility of inappropriate claims.

Public support for personal tax cuts increases

An Ipsos poll suggests more people now favour personal tax reductions even if that means lower spending on public services. Support has risen from 36% in February to 45%, with the strongest shift among Conservative and Reform voters.

At the same time, 70% of respondents believe the Prime Minister is likely to increase personal taxes during the coming year, although that is down from 77% in October. Ipsos said the findings suggest a growing proportion of the public is prioritising direct tax relief and reducing government debt.

Retail & Consumer

JD Sports cuts profit expectations as footwear demand weakens

JD Sports has reduced its forecast for full-year adjusted pre-tax profit to between £700 million and £800 million, from £750 million to £850 million previously. Comparable sales fell 3.1% in its second quarter, with the retailer pointing to weak footwear demand and continuing pressure on consumers.

The warning adds an important counterpoint to the latest improvement in consumer confidence. Households may be feeling less pessimistic, but purchasing behaviour remains selective as energy bills and other living costs absorb a larger share of budgets.

Global Market Summary

Markets entered Thursday cautiously after Wednesday’s rally in US government bonds provided temporary relief from concerns over very high long-term borrowing costs. The US Treasury’s decision to increase long-dated bond buybacks helped drive the 30-year yield sharply lower on Wednesday, weakened the dollar and supported equities, but part of that bond rally was fading by Thursday morning.

UK and Europe

The FTSE 100 closed Wednesday up 0.1% at 10,743, helped by gains in AstraZeneca and Fresnillo. By Thursday morning it had slipped around 0.31% to 10,710.

The STOXX Europe 600 ended Wednesday broadly unchanged at 651.16 and was down around 0.14% at 650.26 in early Thursday trading. The Euro STOXX 50 was approximately 0.15% lower at 6,435.

Germany’s DAX closed Wednesday 0.1% lower at 26,091 before declining another 0.47% to around 25,970 on Thursday morning. The CAC 40 finished Wednesday broadly flat at 8,502 and was again close to unchanged, down around 0.03% at 8,499, on Thursday morning.

Higher-than-expected German producer prices added to caution. July PPI increased 1.1% month on month against expectations of 0.6%, reinforcing concerns that inflationary pressures have not disappeared.

United States

Wall Street finished Wednesday modestly higher overall. The S&P 500 rose 0.21% to 7,708 and the Dow Jones gained 0.22% to 53,463. The Nasdaq 100 fell 0.22% to 29,426, with semiconductor shares lagging, while the Russell 2000 gained 0.50%.

US futures were almost unchanged on Thursday morning, with S&P 500 futures around 7,726, Nasdaq 100 futures near 29,517 and Dow futures around 53,492.

The Federal Reserve’s July minutes showed that most policymakers supported keeping rates at 3.50%-3.75%, but several had favoured an increase and many thought further tightening could become necessary if inflation failed to decline. Middle East tensions and energy prices remain important risks to that outlook.

Asia

Asian markets were considerably stronger overnight. Japan’s Nikkei 225 rose 1.36% to 66,217, helped by gains in major car manufacturers.

Hong Kong’s Hang Seng rose around 0.8% to 25,698, while South Korea’s Kospi surged 5.9% after reports of very large share buybacks from SK Hynix and Samsung. The Shanghai Composite gained 0.24%.

Market drivers

The biggest market influence was the US Treasury’s decision to increase long-term bond buybacks. Treasury Secretary Scott Bessent said September operations would be at least $4 billion each, double the previous level. The move temporarily eased pressure on long-term yields and contributed to weakness in the dollar.

Geopolitical risk remains the other major influence. President Trump has threatened a new “economic D-Day” campaign against Iran, including possible secondary sanctions on countries trading with Tehran. The UAE has separately suspended trade and financial transactions with Iran. With normal traffic through the Strait of Hormuz still severely disrupted, oil and European gas prices remain elevated.

Currencies

GBP/USD was around $1.3627, with sterling benefiting from the broader decline in the US dollar following the Treasury announcement.

While GBP/EUR is at €1.169, with sterling modestly stronger against the euro. Currency markets remain particularly sensitive to changes in UK and US interest-rate expectations.

The dollar has stabilised after falling to a three-month low, but investors are debating whether efforts to suppress long-term US borrowing costs could create a longer-term headwind for the currency.

Commodities

Brent crude was around $93.08 a barrel, up 1.59%, while WTI crude was around $86.75, up 1.07%. Oil has now risen for several consecutive sessions as the confrontation with Iran increases concern over supplies through the Strait of Hormuz.

European natural gas was trading above €63/MWh, near a four-week high. European storage levels were reported at around 62%, below the five-year seasonal norm of 79%.

Gold had surged 3.2% on Wednesday as the dollar weakened and demand for defensive assets increased. It eased around 0.56% to approximately $4,490 an ounce on Thursday morning.

Bond markets

US government bond yields edged back up on Thursday after Wednesday’s sharp rally. The 2-year Treasury yield was around 4.175%, the 10-year around 4.672%, and the 30-year around 5.222%.

For businesses, the important point is that global borrowing costs remain high. The Treasury intervention produced immediate market relief, but it does not remove the underlying pressures from government borrowing, inflation, energy prices and central-bank policy.

International & Trade

US federal debt passes $40 trillion

US federal-government debt has exceeded $40 trillion for the first time. The milestone comes as global bond markets have been under pressure from heavy government and corporate borrowing, higher oil prices and continuing uncertainty about inflation.

After the yield on 30-year US Treasuries reached a 19-year high of 5.34%, the Treasury said it would at least double the amount of long-term debt bought back in each operation from $2 billion to $4 billion. The announcement helped push the 30-year yield back towards 5.18%.

Bitcoin rebounds sharply after White House crypto meeting

Bitcoin surged almost 8% to around $69,500, its highest level since early June, after President Trump met executives from several major cryptocurrency companies at the White House. The rapid reversal triggered more than $1 billion of Bitcoin short-position liquidations in around an hour.

Across the wider crypto market, more than $2.7 billion of bearish positions were reportedly liquidated, producing the biggest short squeeze recorded since 2021. Investors interpreted the White House meeting as another indication that the administration could favour lighter regulation of the sector.

Insolvency Watch

The latest notices include 14 administrations, 4 liquidations and 82 winding-up petitions.

Administrations (14)

• BROMLEY TIMBER AND BUILDERS MERCHANT LTD
• COX LEWIS HEARING LIMITED
• CVW SPV LIMITED
• GOLD BOUTIQUE (UK) LTD
• PERITUM GROUP LTD
• PERITUM LTD
• QP JEWELLERS (UK) LTD
• ROXOA GROUP LTD
• RUBY & OSCAR LTD
• SOMPTING ABBOTTS SCHOOL LIMITED
• TECNIK ENGINEERING LIMITED
• TOTALKARE LTD
• VOLARO DIGITAL LTD
• VWCC LIMITED

Liquidations (4)

• KECHAL
• MAX SOFTWARE LTD
• SIMON MORGAN PROPERTIES LIMITED
• VLEONET IT CONSULTANCY SERVICES LIMITED

Winding-up Petitions (82)

• 1ST LOOK FIRE & SECURITY SYSTEMS LIMITED
• AFRICAS FINEST LTD
• BECONTREE PLANT HIRE LIMITED
• BLACKDICE CYBER LIMITED
• CAASA LAKESIDE 2 LIMITED
• CAMP BEAUMONT DAY CARE LIMITED
• CARE FACILITIES ADMINISTRATION LTD
• CLAUS OUTSOURCING ADVISORS AND MANAGEMENT LTD
• CODELINEX LIMITED
• CONNECTING BRITAIN LTD
• CORPORATE LINX LIMITED
• DEXTERS OF OUNDLE LIMITED
• DMRC TECHNOLOGIES LTD
• DOCTORS’ DIRECT PHARMA LTD
• DSBC LTD
• DSPEM LTD
• ECA (LEGAL) LTD
• ENIGMATIC SMILE LTD
• EUROWISE LIMITED
• EXTRACTION & DUCTING SERVICES LIMITED
• FIRE AND THERMAL INSTALLATION SERVICES LTD
• FREDDIES AFRO CARIBBEAN LTD
• G M SWEET LIMITED
• G.O. GENERAL SALES LTD
• GARDEN THINGS LIMITED
• GOLDENPEAKS ADVISERS LIMITED
• GOOD CHOICE 2016 LIMITED
• GREENALL & THOMPSON LTD
• H&A PROTECTION SERVICES LIMITED
• HAPPY LETTINGS & PROPERTY MANAGEMENT LTD
• HARRINGTON STREET HOTEL LIMITED
• HONEYBEEPUB LTD
• ICARE RECRUITMENT LTD
• IMPULSE MEP LTD
• J. & S. FRANKLIN (HOLDINGS AND MANAGEMENT SERVICES) LIMITED
• JJW CONTRACTORS LTD
• KENSINGTON PARK SCHOOL LIMITED
• KENT FIRE AND SECURITY LIMITED
• KUYA LIMITED
• LCS GROUP KENT LIMITED
• LRB EVENTS LTD
• MADY SOLUTIONS LTD
• MSR MEDIA LTD
• NE-TECH SYSTEMS LTD
• NJB DESIGN AND BUILD LTD
• NORTH BIRMINGHAM TRAVEL LIMITED
• OCTOBER MEDIA LIMITED
• OWL LIVE LTD
• P J CONSTRUCTION (SURREY) LIMITED
• PARTS JUNCTION LTD
• PIPEFIT SOLUTIONS LTD
• PREAH HR INC LTD
• PREMIER CONSTRUCTION (OXON) LIMITED
• PRESTIGE PROPERTIES SW LTD
• PRETO ADMIN 4 LIMITED
• QPD LONDON LTD
• RAFTERS CLEAN LTD
• ROOMAILCAPITAL LTD
• RSM BUILDING AND MAINTENANCE LTD
• SALT ALLAY LIMITED
• SASH CRAFT LIMITED
• SC STORES LTD
• SHERLOCK HEALTHCARE SERVICES LTD
• SI PROPERTY MAINTENANCE GROUP LTD
• SKS BUILDING CONTRACTORS LTD
• SMITH STYLE CONSUMER PRODUCTS COMPANY LIMITED
• SPACIOUS PLACE CONTACT LTD
• SPIKE ENTERPRISE LIMITED
• SUPREME EDUCATION LTD
• TECHNOLOGY BOUTIQUE LIMITED
• THE DEVELOPERS CLUB LIMITED
• TOP 8 FASHION LIMITED
• TOTHERESCUE CONSTRUCTION SERVICES LTD
• TRAVEL CONNECT SALISBURY LIMITED
• TSL PARTNERS LTD
• UK PHOENIX HEALTHCARE LIMITED
• VANGUARD STAFFING SOLUTIONS LTD
• VARSITY LEISURE GROUP LIMITED
• VJ DESIGN AND BUILD LTD
• VOLUME PROJECTS LIMITED
• WEST MIDLANDS ACCIDENT REPAIRS LIMITED
• WYATT CONTRACTORS LIMITED

Keeping cash moving as costs rise again

Inflation, energy prices and high borrowing costs are putting renewed pressure on cashflow across the economy. Even financially sound customers can begin stretching payment terms when their own costs rise, and the warning signs often appear gradually: slower responses, unexplained delays, broken promises or invoices moving beyond their normal payment pattern.

That makes early credit control particularly valuable. CPA Members can use CreditCare reports to assess new and existing customers, monitor debtor risk and identify changes before they become serious problems. Where an invoice is already overdue, CPA can support recovery through a professional and considerate process designed to improve payment while preserving valuable customer relationships.

The objective is simple: keep cash moving, reduce the administrative burden of chasing overdue accounts and prevent an overdue invoice from becoming a bad debt.

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

.