UK Business News Today: 23 July 2026 | Economy, Markets & Insolvencies

UK businesses received some welcome news yesterday as inflation fell to 2.6% and the Government announced a 20% business rates reduction for qualifying pubs, social clubs and smaller live music venues. However, the wider outlook remains difficult. Oil prices have climbed towards $98 a barrel following attacks on tankers and continuing US-Iran hostilities, while employers are warning that taxes and employment costs are restricting recruitment and investment. For SMEs selling on credit, the combination of weaker consumer confidence, higher transport and energy costs, geopolitical risk and continuing insolvencies reinforces the need for careful customer monitoring and disciplined credit control.

James Salmon, Operations Director.

Key Developments

• UK inflation fell from 2.8% to 2.6% in June, although economists expect renewed pressure from energy and oil costs.
• Qualifying pubs, social clubs and some live music venues will receive a 20% business rates reduction from next April.
• Brent crude approached $98 a barrel as attacks threatened both the Strait of Hormuz and the Bab el-Mandeb shipping route.
• MPs and business groups called for reductions in employer National Insurance and the wider business tax burden.
• European markets opened lower as investors reacted to higher oil prices, rising bond yields and concerns over the scale of AI investment.

Economy & Policy

UK inflation falls to 2.6%

UK inflation fell to 2.6% in June, down from 2.8% in May and below forecasts of 2.7%. The decline was driven by lower fuel, food, clothing and transport prices, giving the new Government an early boost in its efforts to ease the cost-of-living squeeze. Chancellor John Healey said the planned removal of VAT from electricity bills should provide further support to households.

Economists warned that the improvement may be temporary. Higher oil prices and the July increase in the energy price cap could push inflation back up, with KPMG UK suggesting June may prove to be the low point of the year and RSM UK forecasting a possible peak of 3.3% in the autumn.

Why it matters: Lower inflation may provide some near-term relief, but businesses should remain cautious about customers’ ability to pay if energy, fuel and borrowing costs rise again.

Badenoch urges Prime Minister to rule out tax rises

Conservative leader Kemi Badenoch has challenged Prime Minister Andy Burnham to rule out further tax increases. She argued that measures including lower bus fares and the removal of VAT from electricity bills would ultimately need to be funded by taxpayers.

The intervention adds to growing scrutiny of how the Government intends to pay for its early cost-of-living commitments. Businesses will be watching closely for signs that future funding could come from higher employment, property or corporate taxes.

Prime Minister warned against property tax raid

Andy Burnham has been urged to reject proposals to replace council tax and stamp duty with a new annual property tax. The Fairer Share Campaign has proposed a charge of 0.48% of a property’s value, rising to 0.96% for second homes and empty properties.

The Centre for London estimates that an owner of a £600,000 property could pay an additional £812 a year. The proposal could have significant regional effects, particularly in London and other areas where property values are high.

Gary Lineker joins calls for higher taxes on the super-rich

Former England footballer Gary Lineker has joined 120 wealthy individuals in calling for higher taxes on extreme wealth. A letter organised by Patriotic Millionaires UK argues that the wealthiest people should contribute more to public services without increasing the burden on ordinary workers.

Academics supporting the campaign estimate that a 2% levy on individuals with wealth above £100 million could raise approximately £10 billion a year. The proposal is likely to contribute to the wider debate about how the Government funds its spending plans.

ICAEW calls for tax support for businesses

The Institute of Chartered Accountants in England and Wales has urged the Government to reduce the tax burden on businesses. In a survey of 875 accountant members, more than half said tackling business taxation was a crucial priority.

The call reflects growing concern that higher employment taxes and administrative costs are reducing business confidence, investment and recruitment.

SME & Business Environment

MPs call for National Insurance relief for younger workers

The Work and Pensions Committee has urged the Government to remove employer National Insurance contributions for workers under 25. Employers currently begin paying contributions for workers aged 21 and over.

MPs argued that the £25 billion increase in employer National Insurance, which raised the main rate from 13.8% to 15% and reduced the earnings threshold from £9,100 to £5,000, has weakened entry-level recruitment. The ICAEW and other business organisations have also warned that the increase is discouraging hiring and investment.

Gen Z confidence weakens as job and housing pressures intensify

Confidence among consumers aged 16 to 29 has deteriorated sharply. GfK’s confidence measure for this age group fell from 18 in December to minus two in June, while sentiment among older consumers changed relatively little.

Around one in six people aged 16 to 24 was unemployed in May, the highest proportion in more than a decade. More than one million young people were outside both employment and education. PwC also found that only around one fifth of 18- to 24-year-olds considered their finances healthy in April, down from almost one third at the beginning of the year.

Rising living costs, mortgage rates, employment taxes and the increasing use of artificial intelligence in entry-level work are all contributing to the pressure. The Government has promised additional employment support and has reduced the national bus fare cap from £3 to £2.

London house prices fall 3.7%

The average London house price fell by 3.7% to £545,000 in the year to May, according to the Office for National Statistics. Mortgage rate uncertainty was identified as one factor weighing on demand.

Prices continued to rise across the rest of the UK, although annual growth slowed from 3.8% in April to 2.7% in May. The divergence highlights the particular affordability and financing pressures affecting the capital.

Tax & Government

Business rates cut announced for qualifying pubs and clubs

The Government has announced a 20% business rates reduction for qualifying pubs, social clubs and some live music venues in England. A typical pub is expected to save approximately £1,100 in the financial year beginning next April.

The package is expected to cost the Treasury around £100 million a year and will be funded partly through a review of reliefs available to businesses including vape shops. Hotels, restaurants and the largest live music venues are not included.

UK Hospitality welcomed the support but said a wider solution was still required. The organisation highlighted particularly sharp increases in rates for hotels, while restaurant operators warned that VAT and employer National Insurance remained major pressures.

The announcement follows the Government’s decisions to remove VAT from electricity bills and reduce the national bus fare cap.

Why it matters: The relief will give some smaller venues additional breathing space, but suppliers should continue to monitor hospitality customers carefully because labour, energy and property costs remain high.

Industry & Investment

Alphabet raises AI spending as cloud demand surges

Alphabet increased its annual capital spending forecast to between $195 billion and $205 billion, equivalent to roughly $200 billion, as it expands artificial intelligence infrastructure. The company reported cloud revenue of $24.77 billion for the period ending 30 June, an increase of 82% from a year earlier.

Alphabet’s earnings per share rose to $9.11, compared with analyst estimates of approximately $2.88. However, a large part of the reported profit increase came from unrealised asset revaluations. Around $99 billion of Alphabet’s $112.1 billion profit was attributed to investment gains rather than underlying trading activity.

The strength of the cloud business demonstrated continuing demand for AI infrastructure and services, but investors reacted cautiously to the scale of the required expenditure and its effect on free cashflow.

European Commission approves Paramount’s Warner Bros Discovery bid

The European Commission has conditionally approved Paramount’s $111 billion offer to acquire Warner Bros Discovery. Paramount has agreed to concessions intended to reduce competition concerns, including ending its interest in United International Pictures within 13 months of completion.

The transaction still faces significant hurdles. A group of 12 US states has filed legal action seeking to block the merger.

EasyJet quarterly profit falls 70%

EasyJet reported pre-tax profit of £85 million for the quarter ending in June, down from £286 million a year earlier. The decline was attributed to higher jet fuel costs and weaker consumer demand linked to the Middle East conflict.

The result was slightly ahead of analyst expectations of approximately £80 million. EasyJet is also the subject of competing approaches from US private equity groups Castlelake and Apollo Global Management, with Apollo’s 715p-per-share offer currently endorsed by the airline.

International & Trade

Tanker attacks widen Middle East shipping risk

The Houthis said they had targeted two oil tankers in the Red Sea, while the UK Maritime Trade Operations centre reported that a tanker had been struck southwest of Al Shuqaiq on Saudi Arabia’s Red Sea coast.

The attacks create a second major shipping risk alongside the Strait of Hormuz. The United States has continued its bombing campaign against Iran, launching a twelfth consecutive night of strikes aimed at missile facilities, drone storage sites and air defence assets.

Neither Washington nor Tehran has shown much willingness to return to negotiations. The United States has said it will intensify its campaign until Iran reopens the Strait of Hormuz.

US to support study of Saudi nuclear capability

President Donald Trump has agreed that the United States will help Saudi Arabia explore the development of a domestic nuclear capability, including the enrichment of fissile material.

The precise terms have not been disclosed, although reports indicate that the two countries will conduct a joint study into the construction of a Saudi nuclear facility. The development will be closely watched because of its geopolitical and energy-market implications.

UK weather forecast

The UK is expected to have a largely dry and warm day, with hazy sunshine across much of England and Wales. Conditions will be cloudier farther north, with some patchy rain possible in northwest Scotland and isolated showers in parts of eastern England.

Temperatures are expected to reach approximately 26°C in London and Cardiff, 23°C in Newcastle, 21°C in Liverpool, and around 20°C in Belfast and Glasgow.

Global Market Summary

Global markets are being driven by a difficult combination of rising oil prices, escalating Middle East conflict, higher bond yields and concerns about the cost of artificial intelligence investment.

European shares opened lower on Thursday after showing relative resilience during Wednesday’s session. Technology and consumer stocks were among the weakest areas, while energy companies benefited from higher crude prices.

Major index levels

• FTSE 100: 10,705.74, down 0.10%
• STOXX Europe 600: 642.49, down 0.69%
• Euro STOXX 50: 6,271.23, down 0.72%
• DAX: 24,974.76, down 0.72%
• CAC 40: 8,357.89, down 0.95%
• S&P 500: 7,498.96, down 0.14% at Wednesday’s close
• Dow Jones: 52,218.58, broadly flat
• Nasdaq 100: 28,998.10, down 0.50%
• Nikkei 225: 66,422.60, up 0.46%
• Hang Seng: 25,151.18, up 1.04%

Asian markets generally advanced, led by semiconductor businesses benefiting from Alphabet’s AI investment plans. South Korea’s Kospi rose strongly, while Samsung Electronics and SK Hynix gained as investors anticipated further demand for advanced chips and data-centre equipment.

US markets closed modestly lower on Wednesday. Alphabet and Tesla then fell in after-hours trading as investors focused on higher capital expenditure and weaker cash generation. Alphabet’s operational performance was strong, but the size of its proposed AI investment raised concerns about returns and free cashflow. Tesla’s earnings missed expectations and its free cashflow turned negative.

Market drivers

The Middle East conflict remains the dominant market risk. Brent crude has risen by approximately 36% since 2 July as investors assess the possibility of disruption at both the Strait of Hormuz and the Bab el-Mandeb Strait.

Bond yields have also moved higher as investors reconsider the inflation outlook. The US ten-year Treasury yield briefly rose above 4.665%, close to its 2026 high, while the 30-year yield remained above 5%.

The European Central Bank is expected to hold its main rate at 2.25%, although markets will listen carefully for signs that higher oil prices could lead to a more restrictive policy later in the year.

Currencies

Sterling remained within relatively narrow ranges:

• GBP/USD: approximately $1.33 to $1.34
• GBP/EUR: approximately €1.17 to €1.18

The US dollar eased slightly as stronger Asian markets reduced demand for safe-haven assets. The euro remained range-bound ahead of the ECB decision.

The Japanese yen fell to its weakest level against the dollar in around four decades before recovering slightly following suggestions that the Bank of Japan could raise rates more quickly than previously expected.

Commodities

• Brent crude: approximately $96 to $98 a barrel
• WTI crude: approximately $88 a barrel
• Gold: approximately $4,122 an ounce

Oil remains the most important movement for UK businesses. Higher crude prices feed into fuel, distribution, manufacturing and energy costs and can ultimately increase the amount of credit suppliers must extend to customers.

Gold rose as investors sought protection from geopolitical risk, inflation and concerns about government debt.

Why markets matter to SMEs: Higher energy prices and bond yields can raise operating and borrowing costs at the same time that customer budgets are being squeezed. Businesses selling on credit should review exposure limits, monitor changes in payment behaviour and avoid allowing overdue balances to build unchecked.

Insolvency Watch

Administrations (4)

• CARTER WELLS LIMITED
• MAX FLEETSUPPORT LTD
• SUPERBIKE FACTORY GROUP LIMITED
• SUPERBIKE FACTORY LIMITED

Liquidations (9)

• CES LEGAL SERVICES LTD
• CSW PRODUCTION LTD
• DE-VILLE ACCOMMODATION LIMITED
• GROVE DEVELOPMENTS (CORBY) LIMITED
• PIRENTO LIMITED
• POINT 5 CONSULTING LIMITED
• SAMUEL LITHGOW YOUTH CENTRE
• SONOMA PARTNERS LTD
• SPARE IPG 4 LIMITED

Winding-up Petitions (1)

• B & S BUILDING SUPPLIES LTD

Protecting cashflow as costs and risks rise

Today’s news offers some signs of relief, but it also underlines how quickly conditions can change. Inflation is lower for now, yet oil, transport, energy and borrowing costs are moving higher. At the same time, tax pressure and weaker consumer confidence are affecting recruitment, spending and business resilience.

Businesses selling on credit should not wait for a missed payment to become a serious problem. CreditCare reports can help assess customers before credit is extended, while debtor monitoring can identify changes in financial risk. CPA can also support structured credit control and recover overdue accounts professionally, helping Members improve payment performance without unnecessarily damaging valuable customer 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/

Just call 020 8846 0000 (Monday to Friday, 9am to 5pm) or email PaidQuick@cpa.co.uk today.A little relief, but costs still matter

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

.