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

With Wednesday’s Budget approaching, everyone seems to have a suggestion for the Chancellor’s money. Small firms want relief, defence needs investment and households need help with bills. But the public finances leave little room to please everyone. If you run a business, the practical question is what comes next for your costs and your customers’ ability to pay. Today’s news offers some encouragement on growth, alongside plenty of reasons to keep cashflow firmly in view.

James Salmon, Operations Director.

Key Developments

• Business groups want tax relief as firms delay investment and recruitment decisions.
• Stronger October business activity contrasts with September’s fall in retail sales.
• Tax arrears and proposed recovery powers put payment pressures in focus.
• Possible fuel and banking tax changes could feed through to business costs.
• Markets face a busy week of technology earnings and central-bank decisions.

Economy & Policy

A crowded Budget agenda meets limited spending room

John Healey must balance bond-market confidence with demands from Labour MPs for support and investment. Reports suggest £70bn in additional borrowing, with fiscal headroom reduced to around £12bn, while the Treasury signals no broad tax rises and targeted energy help. The IFS has also highlighted persistent borrowing forecast errors, comparing average fifth-year borrowing of 4.8% of GDP with forecasts of 1.1%.

Major welfare and defence decisions may be deferred, illustrating how much remains unresolved beyond Wednesday’s announcements. ft.com

Why it matters: Budget uncertainty can delay customer orders and investment, even before any tax changes take effect.

Businesses want breathing space before taking the next step

A DJH survey of 82 businesses found seven in 10 cautious or anxious, nearly half delaying decisions and more than 20% pausing recruitment. The FSB wants the Small Business Rate Relief threshold raised from £12,000 to £25,000, potentially exempting 250,000 firms, alongside a higher Employment Allowance. Baroness Ayesha Hazarika has separately called for modest SME tax relief to protect high streets and youth employment.

Prosper UK wants family-business inheritance tax relief restored, business rates potentially replaced by a land value tax, and pension tax relief linked to investing at least 25% of new contributions in UK assets.

Why it matters: When customers postpone spending, suppliers can feel the effect through weaker order books and slower cash receipts.

Calls for spending restraint add to the pressure

The IEA argues that fewer than 7m of nearly 29m jobs generate enough tax to match government spending of £19,574 per person, using an earnings threshold of £42,375. That is the think-tank’s comparison, rather than a complete measure of how households contribute to public finances. Former Bank of England chief economist Andy Haldane also wants spending cuts, warning that a proposed £2bn bank tax increase could ultimately reach households and businesses.

Stronger activity offers a welcome counterweight

October’s PMI rose to 53.1 from 52.0, beating forecasts of 51.8 and reaching an eight-month high. New work grew at its fastest pace in more than two years. That suggests businesses are finding opportunities despite the caution surrounding the Budget.

Why it matters: Growing sales can increase working-capital needs when wages and suppliers must be paid before customer invoices fall due.

Tax & Government

Tax recovery moves up the agenda as arrears age

The NAO figures supplied put unpaid tax at £43.8bn, against £15bn in 2018/19, with £18.8bn considered unlikely to be recovered and 8.2m taxpayers in debt. Reported Budget proposals would expand recovery directly from bank accounts, targeting up to £4bn through lower thresholds and instalments without a court order. Experts want safeguards against deductions where liabilities are disputed or non-engagement reflects illness or missed correspondence.

Separately, planned property-information sharing across 25 jurisdictions, including France, Germany and Spain, is expected to raise more than £100m.

Why it matters: Customers carrying tax arrears may face competing demands on the same cash needed to pay suppliers.

Revenue options extend beyond income tax

BBC coverage identifies a possible bank surcharge increase from 3% to 5.5%, raising £1bn–£2bn annually, and gambling-machine tax rising from 20% to 40%, potentially raising £460m. Marketplace VAT collection could generate around £1bn, while welfare savings remain another option. These are reported options, rather than confirmed Budget measures.

Meanwhile, the supplied Times report highlights previously announced changes affecting inherited pensions, a £12,000 cash ISA allowance, two-percentage-point increases in savings and rental income tax, and frozen thresholds. Pensioners may receive a £13,036 allowance as the state pension rises £489, while the £268,275 tax-free pension lump-sum limit is reportedly being retained.

Less paperwork could help—but the detail matters

The Government estimates reporting reforms and tariff suspensions on more than 250 products could save businesses £800m annually. Reported changes include removing public profit-and-loss filing requirements for small companies from April 2028, with £290m in reporting savings and £105m from reducing duplication for asset managers. For credit suppliers, any reduction in publicly available accounts would make other sources of customer intelligence more important.

Retail & Consumer

Household pressure is still reaching the shop counter

Retail sales volumes fell 0.4% in September, worse than the expected 0.1% decline, after August’s increase was revised to 0.7%. Sales nevertheless rose 0.7% across the quarter and 0.8% year on year, showing a mixed picture rather than a uniform retreat. The ONS also highlighted warm weather affecting autumn clothing sales. Office for National Statistics

Council tax arrears in England reportedly reached £7.4bn after rising £782m in 2025/26, while proposed reforms include 12-month instalments, a £100 recovery-charge cap and debt-advice signposting.

Why it matters: Household bills can squeeze discretionary spending, affecting the retailers, hospitality firms and suppliers that depend on it.

Energy & Costs

Imported fuel could face an additional carbon charge

The Chancellor is reportedly considering extending the carbon border adjustment mechanism to imported petrol and diesel. The aim would be to reflect carbon costs faced by British refineries, although critics warn of higher pump and supply-chain costs. Businesses also await a decision on extending the fuel duty freeze beyond 31 December.

Why it matters: Delivery, travel and haulage costs can rise before businesses have an opportunity to adjust customer prices.

Industry & Investment

Defence and biosecurity offer potential investment opportunities

Reported plans would channel defence investment through the National Wealth Fund and British Business Bank, supporting manufacturers, drone developers and AI firms. Additional institutional funding of £20.4bn from 2028/29 is reported, but the defence allocation remains unconfirmed; the OBR estimates reaching 3% of GDP by 2030 would require another £17.3bn in 2029/30. Separately, the Government announced £100m for an AI Biosecurity Lab, supported by OpenAI, Anthropic and Google DeepMind, with DeepMind and Basecamp Research partnerships.

Technology demand remains strong—but returns matter

Apple’s $2,000-plus foldable iPhone Duo is attracting strong demand, with new orders reportedly facing delivery at the end of January and the top model priced at $3,199. Alphabet, Microsoft and Amazon are expected to deliver double-digit revenue growth, while investors scrutinise AI investment returns. Meta’s reported future spending commitments increased by $125bn to $825bn, illustrating the scale of the spending debate.

SME & Business Environment

Digital disruption makes continuity planning a practical priority

Governments, banks and airlines continue work to address critical PHP vulnerabilities. The NCSC urges organisations to identify affected systems and apply security updates, with mitigation or temporary shutdown considered where necessary. Businesses should obtain confirmation from their hosting provider or IT support that their systems have been assessed and secured. National Cyber Security Centre

Separately, government household guidance recommends three days of essential supplies, cash and access to important documents.

Why it matters: Businesses also need workable arrangements for taking orders, accessing invoice records and contacting customers during disruption.

Global Market Summary

The day shows a cautiously positive start, with S&P 500 futures up 0.3% and the STOXX Europe 600 up 0.4%. Investors face technology earnings, Wednesday’s Federal Reserve decision, Thursday’s ECB meeting and the UK Budget.

• UK: Markets show easing gilt risk premiums ahead of the Budget.
• Europe: French bonds rallied after Moody’s retained its Aa3 rating, with the French–German yield spread narrowing five basis points to 162.
• US: AI spending remains a concern, with CoreWeave down 41% since 6 October and semiconductor shares under pressure.
• Asia and emerging markets: Theres sharp falls in Brazil-linked assets following Lula’s election victory.
• Commodities: WTI fell 1.9% to $101.30, while gold rose 0.6% to $4,018 an ounce. Brent was described as above $115, without an exact contemporaneous quote or daily move.

The market expects the Fed to hold at 3.75%–4.00% and the ECB at 2.50%; these are expectations, not decisions. Other corporate updates include stronger WuXi AppTec results and guidance, disappointing Volvo Car earnings, higher Eni oil-and-gas earnings, a L’Oréal sales beat, an improved Booz Allen outlook and reports of an SK Hynix special dividend.

For SMEs, the practical links are borrowing costs, exchange rates and fuel prices.

Insolvency Watch

Administrations (1)

• MALIBU HEALTH PRODUCTS LIMITED

Liquidations (28)

• A H – BIOTECH LIMITED
• ACER ESTATES LIMITED
• AMCOR INVESTMENTS GERMANY
• ARMFIELD MOLESEY LIMITED
• BFG CAPITAL HOLDINGS LTD
• BISHOPS CLEEVE MEDICAL CENTRE LIMITED
• BISPECIFIC LIMITED
• BRIAN FOLLWELL ASSOCIATES LIMITED
• BRIGHTBRIDGE PARTNERS LIMITED
• CLOUD INVESTMENT HOLDINGS LIMITED
• EARNSDALE HOLDINGS LIMITED
• EUROFREE LIMITED
• FOGGY FURZE LIMITED
• GSSECH LTD
• HERMETICA LTD
• HOBBIT HAULAGE LTD
• J W CAR AGENCY LIMITED
• JVR CONSULTING LIMITED
• KINNAIRD NEGOTIATION LIMITED
• NAVO SERVICES LTD
• ORCOMBE LTD
• PETE QUARTLY PHYSIOTHERAPY LIMITED
• PONYCO LTD
• RED TEAM LTD
• TEE TIME TOURS LIMITED
• VISTA COMMERCIAL LTD
• VLNA LIMITED
• WILLOW HOUSE CAPITAL HOLDINGS LTD

Winding-up Petitions (3)

• BORG WOODWORK DESIGNS LTD
• E WAREHOUSE FOODS LTD
• LUCKY FOUNTAIN LIMITED

Keep cash moving while the Budget takes shape

You cannot control Wednesday’s announcements, but you can review overdue invoices, check customer exposure and act early when payment patterns change. CPA’s CreditCare credit reports, debtor monitoring and credit control support help businesses make informed decisions. The CPA Overdue Account Recovery Service helps recover overdue invoices while preserving customer relationships.

Call CPA on 020 8846 0000 during business hours, Monday to Friday, 9am to 5pm.
Email PaidQuick@cpa.co.uk.
Visit 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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