UK Business News Today: 26 August 2026 | Economy, Markets & Insolvencies

Energy costs are back at the centre of the UK business outlook today, with Ofgem raising the household price cap, European LNG prices at their highest since 2023 and EDF warning that bills could remain structurally higher through the end of the decade. Oil prices are moving in the opposite direction as tentative progress over the Strait of Hormuz reduces some immediate supply fears. For SMEs, the combination of energy volatility, employment pressures, international trade disputes and stubborn financing costs reinforces the importance of protecting margins, monitoring customer risk and keeping cash moving.

James Salmon, Operations Director.

Key Developments

• Ofgem will raise the energy price cap by 4% to £1,723 from 1 October, with higher wholesale gas prices linked to the Middle East conflict the main driver.
• More than one million 16 to 24-year-olds are NEET, while youth unemployment has reached 16.4%, its highest level since 2014.
• European LNG prices are at their highest since 2023, more than double their level a year ago.
• Canada will impose retaliatory tariffs on $20bn of US goods from 8 September as trade tensions escalate.
• Brent crude has fallen towards $86 a barrel as Iran and Oman discuss a possible temporary navigational corridor through the Strait of Hormuz.

Energy & Costs

Ofgem raises energy price cap by 4%

Ofgem has increased Great Britain’s energy price cap to £1,723 a year for a typical household paying by direct debit between 1 October and 31 December. That is £60 above the current £1,663 level and slightly below the £1,729.31 forecast from Cornwall Insight. Ofgem said higher wholesale gas prices linked to the continuing Middle East conflict were the principal reason for the increase. The new cap is the highest in three years, although it remains 52% below the peak reached during the 2022 energy crisis.

Why it matters: Higher household energy costs can weaken disposable income and customer spending while similar wholesale pressures feed through into SME operating costs and margins.

European LNG prices reach three-year high

The Middle East conflict has pushed liquefied natural gas prices in north-west Europe to their highest level in more than three years. Prices are now more than double their level a year ago, highlighting the continuing sensitivity of European energy markets to geopolitical disruption.

The rise is particularly significant because falling oil prices do not necessarily translate into lower gas and electricity costs. European businesses therefore continue to face uncertainty around one of their largest operating expenses.

Why it matters: Persistent energy inflation can squeeze already-thin SME margins and increase the risk that customers delay supplier payments to manage their own cashflow.

EDF warns energy bills could rise 13% by 2030

EDF Energy has warned that average energy bills could increase by 13% by 2030 without continued government support. It estimates that standard variable tariff bills could reach around £1,790 a year, with rising non-energy costs offsetting some of the benefit of lower wholesale prices.

The warning suggests that the pressure on energy bills may be structural rather than simply a short-term consequence of current geopolitical disruption.

Why it matters: Businesses should avoid assuming that energy costs will automatically return to previous levels and should build continuing cost pressure into pricing, budgeting and credit decisions.

Oil falls as Hormuz diplomacy offers hope

Brent crude has fallen towards $86 a barrel following reports that Iran and Oman are again discussing a temporary joint navigational corridor through the Strait of Hormuz. The discussions have reduced some of the geopolitical risk premium that had previously driven oil towards $95.

China, a major buyer of Iranian oil, has meanwhile rejected US sanctions as illegal and said its trade with Iran should not be disrupted. The combination of diplomacy and resistance to US pressure has helped push crude prices lower.

Employment & Labour

Burnham calls on businesses to help tackle youth unemployment

Prime Minister Andy Burnham has called on British businesses to offer more work experience opportunities to young people as part of efforts to tackle what he described as a “youth unemployment crisis.”

Sainsbury’s will provide 10,000 work experience placements in deprived areas across England, Scotland and Wales from October. More than one million 16 to 24-year-olds are currently classified as NEET, meaning they are not in education, employment or training, while the youth unemployment rate has reached 16.4%, its highest level since 2014.

The Government has already announced new technical education routes for children from the age of 14, while former Labour minister Alan Milburn is conducting a wider review of youth unemployment. He has warned that one in six young people could be NEET by 2031.

CBI urges employer NIC cut

The Confederation of British Industry has urged Chancellor John Healey to reduce employer National Insurance contributions in response to the youth unemployment problem.

The CBI wants the headline employer NIC rate reduced from 15% to 14% and is calling for wider exemptions for workers under 25. Chief Executive Rain Newton Smith said too many young people were being locked out of the labour market despite having much to offer employers.

The intervention reflects growing concern that higher employment costs may be discouraging recruitment, particularly at entry level.

Employers look beyond non-compete agreements

City employers are increasingly considering deferred bonuses, share incentives and other retention tools as alternatives to traditional non-compete agreements.

The Department for Business and Trade is considering possible restrictions on non-compete clauses following a consultation that closed in February. Businesses are therefore starting to prepare for potential changes before the Government confirms its approach.

SME & Business Environment

Reform UK sets out small-business proposals

Reform UK economics spokesman Robert Jenrick has announced a package of tax and regulatory proposals aimed at small businesses.

Measures include reversing increases in employer National Insurance contributions, replacing GDPR with what the party describes as a lighter regulatory system and expanding the Seed Enterprise Investment Scheme. Jenrick described the proposals as the party’s biggest small-business plan in a decade.

For businesses, the proposals remain political policy rather than current law, but they illustrate how taxation and regulatory costs are becoming increasingly prominent in the debate over UK business competitiveness.

Industry & Investment

Government commits £71m to Devon tungsten mine

The Government will invest up to £71m through the National Wealth Fund to restart operations at the Hemerdon tungsten and tin mine in Devon.

The project is expected to support around 350 jobs, while the Government will secure 50% of production for domestic use. Chancellor John Healey said the investment would strengthen Britain’s defence and nuclear supply chains amid growing concerns about access to strategic minerals.

The move forms part of a wider effort to increase UK resilience in strategically important industries.

Housebuilders rally after £10bn housing package

Shares in some of Britain’s biggest housebuilders rose sharply after the Government announced a £10bn affordable-housing package intended to support around 70,000 new homes, primarily for social rent.

Vistry shares rose more than 12%, while Barratt Redrow and Persimmon were among the strongest FTSE 100 performers following the announcement.

The funding comes at a time when some developers have been reducing land purchases because of weaker demand, higher costs and wider economic uncertainty.

International & Trade

Canada retaliates against US tariffs

Canada has announced retaliatory tariffs on around $20bn of American goods, taking effect from 8 September.

Existing Canadian tariffs on US steel and aluminium will double to 50%, while tariffs of between 15% and 50% will apply to goods including furniture, clothing, dairy products and machinery.

The measures match tariffs imposed by the United States. With the US economy around 13 times larger than Canada’s, Prime Minister Mark Carney is expected to try to prevent the dispute escalating into a broader trade war.

China promises to defend trade with Iran

China has condemned US attempts to restrict its trade with Iran and says it will take “all necessary measures” to protect its interests.

China purchases the large majority of Iranian oil exports. The US has imposed sanctions on companies in mainland China and Hong Kong but has so far stopped short of targeting major Chinese financial institutions.

The dispute adds another layer of uncertainty to already strained global trading relationships.

Economy & Policy

Government develops national resilience plans

The Government is reportedly intensifying work on a home defence and resilience plan covering risks including cyber attacks and severe weather.

A public information campaign is also expected to advise households to maintain basic emergency supplies such as bottled water and tinned food.

The initiative reflects growing concern about the economic and operational consequences of cyber threats, extreme weather and wider national disruption.

Anthropic puts potential AI market above $30tn

AI company Anthropic is reportedly telling investors that the total addressable market for artificial intelligence could eventually exceed $30 trillion.

The company is projecting annual revenue of around $190bn to $200bn by 2028 and is reportedly considering an October IPO that could value it at approximately $2 trillion.

For perspective, a $30tn market would be equivalent to roughly one quarter of current global annual GDP. That does not mean Anthropic expects to earn $30tn itself; a total addressable market describes the theoretical size of the entire market under very broad assumptions.

UK Weather

Warm and humid conditions continue across parts of the UK today, with sunny spells interrupted by showers moving north through England and Wales. Some showers may become heavy or thundery, creating a risk of local disruption. Scotland should remain largely drier, with temperatures generally reaching the low-to-mid 20s across much of England and Wales.

Businesses involved in transport, construction, hospitality and outdoor work should be alert to localised disruption from heavy showers and thunderstorms.

Global Market Summary

Global markets are being driven by a sharp reversal in oil prices, renewed central-bank concerns over inflation and caution ahead of Nvidia’s latest results.

The FTSE 100 closed Tuesday 0.29% higher at 10,886.16, its sixth consecutive rise and longest winning streak since October 2025. The STOXX Europe 600 gained 0.35%, the Euro STOXX 50 rose 0.12% to 6,455.63, Germany’s DAX climbed 0.61% to 26,266.14, while France’s CAC 40 fell 0.16% to 8,439.20.

US markets also advanced. The S&P 500 gained 0.30% to 7,677.28, the Dow Jones rose 0.56% to 53,577.40, and the Nasdaq Composite increased 0.50% to 26,151.30. Nvidia ended a seven-session losing streak ahead of results that investors view as an important test of the continuing AI investment boom.

Asian markets followed Wall Street higher overnight. Japan’s Nikkei 225 gained 0.62% to 66,262.16, while Hong Kong’s Hang Seng rose 0.56% to 25,652.97. South Korea’s KOSPI added 0.97%, while Australia’s ASX 200 was the main regional laggard, falling 0.40%.

Market drivers

The biggest market move has been the fall in oil following discussions between Iran and Oman over an interim arrangement for shipping through the Strait of Hormuz. Brent has dropped by around 8% from last Friday’s high near $95, easing some immediate inflation fears.

At the same time, European gas prices remain elevated and ECB Executive Board member Isabel Schnabel has argued that further monetary tightening may be necessary. That leaves businesses facing an unusual mix of falling oil prices but continuing pressure from gas, electricity and borrowing costs.

Investors are also watching the escalating US-Canada trade dispute and awaiting US inflation data, while Nvidia’s results are expected to influence sentiment across the global technology sector.

Currencies

GBP/USD: 1.3636, down around 0.13% on the day.

Sterling has eased slightly after recent strength. Expectations for further Bank of England tightening have also moderated as oil prices have fallen.

GBP/EUR: approximately 1.168, slightly lower on the day.

The euro has strengthened marginally against sterling, helped by renewed speculation that persistent European inflation could require further ECB tightening.

Commodities

Brent crude: $86.60 a barrel, down 2.24%

WTI crude: $80.42 a barrel, down 2.37%

Both benchmarks have fallen sharply as the market responds to signs of possible progress on shipping through the Strait of Hormuz.

Gold: $4,626.87 an ounce, down 0.65%

Gold has pulled back after five consecutive gains, although it remains close to historically elevated levels following a rise of more than 7% over the previous week.

For UK businesses, the most important message is that lower oil prices offer some relief but do not remove the broader cost problem. European gas remains expensive, borrowing costs remain elevated and geopolitical conditions continue to shift rapidly.

Insolvency Watch

Administrations (2)

• MAPX LTD
• T. K. T. COSY FOAM LIMITED

Liquidations (8)

• CBCH CONSULTING LTD
• ESPALIER VENTURES PROPERTY (LANSDOWNE ROAD) LTD
• H & J BUILDERS LTD
• HAVEN REHABILITATION SERVICES LIMITED
• O365 LIMITED
• PENINSULA PROPERTIES LIMITED
• RLC ENGINEERING SERVICES LIMITED
• WILL CHAN CONSULTING LTD

Keeping cash moving when costs remain unpredictable

Today’s news illustrates the difficult environment facing businesses that sell on credit. Energy costs remain uncertain, employment expenses are under scrutiny and geopolitical events can change input costs and customer confidence surprisingly quickly.

That makes strong credit control particularly important. A profitable sale does not protect cashflow until the invoice is actually paid.

CPA can help businesses strengthen their position through CreditCare credit reports, debtor monitoring, professional credit control support and the recovery of overdue accounts. Early visibility of changes in a customer’s circumstances can help businesses make better credit decisions, while prompt and considerate follow-up improves the chances of invoices being paid before problems become entrenched.

CPA’s approach is designed to improve payment performance while preserving 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/

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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