UK Business News Today: 28 July 2026 | Economy, Markets & Insolvencies

The new government is attempting to balance welfare reform, investment and business support while facing growing demands for clarity on tax and social care policy. Plans to strengthen technical education and move more young people into work could help address skills shortages over time, but employers remain concerned about payroll costs, business rates and weak demand. Food inflation has eased, offering some relief, although global instability, employment costs and renewed volatility in technology markets continue to create uncertainty for SME costs, confidence and customer payment behaviour.

James Salmon, Operations Director.

Key Developments

Key Developments

• Andy Burnham plans to link technical education more closely with local employers as part of efforts to reduce youth unemployment and welfare spending.
• Business leaders are calling for lower employment taxes, wider business-rates relief and clearer consultation before policy changes.
• Social care funding remains unresolved, with speculation over possible taxes on estates, pensions, property and wealth creating uncertainty.
• UK food inflation fell to 2.2%, while overall shop-price inflation eased to 0.9%.
• Global technology shares fell sharply as investors questioned AI investment returns and China’s semiconductor progress.

Economy & Policy

Government seeks to reduce welfare spending through work and training

Prime Minister Andy Burnham said Britain must become more serious about reducing welfare expenditure, which is expected to exceed £330 billion this financial year. He suggested that some benefit payments could become conditional on recipients accepting appropriate employment, training or support opportunities.

The government is placing particular emphasis on younger people. Around one million young people are currently outside employment, education or training, while unemployment among 16- to 24-year-olds is at its highest level for more than a decade.

Burnham has stressed that reform should not begin by blaming people receiving benefits. He said many young adults had been failed by inadequate employment, skills and mental-health support.

Technical education to become part of secondary-school learning

Pupils in England will be able to study technical subjects including manufacturing, artificial intelligence, engineering and cybersecurity from Year 10 alongside English, mathematics and science.

Courses will be linked to local industries, with employers, councils and combined authorities helping identify the skills required in each area. The government expects some pathways to be operating by 2028 and intends to provide more work experience and direct contact with local employers.

Ofsted will also place greater weight on technical education and preparation for employment when assessing schools. Education unions welcomed the ambition but warned that schools need clear funding, staffing and implementation guidance.

Questions remain about how the system will operate in areas with limited industrial activity and whether choosing a technical pathway at 14 could restrict pupils’ future options.

Employment falls across sectors targeted for growth

Employment across eight sectors identified as priorities in the government’s industrial strategy fell by 0.6% during 2025. The decline came despite a reported 3% increase in productivity across those industries.

The wider UK unemployment rate has risen to 4.9%. The government maintains that its industrial strategy is attracting private investment and could support more than one million jobs by 2035.

Burnham’s economic approach combines intervention and devolution

Commentary on the government’s emerging economic direction suggests that Burnham is combining elements of New Labour with a stronger emphasis on manufacturing, public ownership and regional devolution.

His preference for investment in local transport, industrial policy and decision-making outside London reflects his experience as Mayor of Greater Manchester. Critics question whether policies inspired by earlier periods of state-led industrial development are suited to today’s economy.

For SMEs, the practical test will be whether devolved funding and industrial policy improve access to skills, infrastructure and local investment rather than creating additional layers of administration.

Tax & Government

Business leaders demand lower taxes and employment costs

Executives from Currys, Heathrow, Mulberry, Butlin’s, Leon and JD Wetherspoon have called on the government to reduce the cost of employing people and provide greater certainty before making policy changes.

Currys chief executive Alex Baldock called for business rates to be abolished, arguing that lower costs would allow retailers to invest and recruit. Hospitality leaders want existing rates relief for pubs and music venues extended to restaurants, hotels and leisure businesses.

Butlin’s called for a hospitality VAT reduction, while Leon urged the government to reduce employer National Insurance. JD Wetherspoon said the tax treatment of food sold by pubs remains unfair compared with supermarkets.

Mulberry renewed calls for VAT-free shopping for overseas visitors, while Heathrow sought continued government support for its proposed £49 billion expansion.

Social care reform moves higher up the agenda

Burnham warned that the NHS could collapse under the pressure created by an unreformed social care system. He said he did not want to leave office without delivering substantial change, although he declined to promise a timetable.

The government is expected to accelerate the Casey Commission’s review of adult social care, whose final recommendations were previously not expected until 2028.

Social care is not generally free at the point of use in England. People with savings above £23,250 are normally ineligible for council-funded support, and previous proposals to cap lifetime care costs were abandoned.

Reports suggest possible levy on estates

Downing Street declined to rule out reports that the Prime Minister could revive an earlier proposal for a 10% levy on estates to fund social care.

Opposition politicians argued that the government should reduce welfare expenditure rather than increase taxes on savings and inheritances. No formal proposal has been announced, and final tax decisions remain a matter for the Chancellor and the Budget.

Speculation alone may affect household financial planning, investment and confidence ahead of any confirmed policy.

Burnham rejects reports of new annual property tax

The Prime Minister said he was not considering abolishing council tax or stamp duty after reports suggested they could be replaced by an annual levy equivalent to 0.48% of a property’s value, with a higher charge for second homes.

Downing Street described the reports as speculation. Economists warned that uncertainty over property taxation could cause buyers and sellers to delay transactions.

Investors demand clarity over pension taxation

AJ Bell chief executive Michael Summersgill called on Chancellor John Healey to confirm that pension tax incentives will not be changed.

He said speculation had already led to approximately £10 billion being withdrawn from pensions earlier than planned. Premature withdrawals could reduce long-term investment in British companies and weaken retirement security.

UK millionaire population reportedly falls by 7%

The Adam Smith Institute estimated that the number of millionaires in Britain fell by 7% over the past year to 442,000, the lowest level since the financial crisis.

The organisation attributed the fall to weaker property prices and the departure of wealthy individuals following changes to the non-dom regime. It warned that the loss of wealthy investors could reduce capital available to British businesses.

The estimate comes amid continuing speculation about possible taxes on wealth, although no confirmed proposal has been announced.

SME & Business Environment

UK food inflation eases to 2.2%

Food inflation fell for a sixth consecutive month, declining from 2.4% in June to 2.2% in July, according to the British Retail Consortium.

Overall shop-price inflation fell to a six-month low of 0.9%. Discounting of clothing and footwear as retailers cleared summer inventory contributed to the decline.

The BRC warned that higher employment costs and global instability could push prices up again later in the year.

ONS turns to AI as survey delays increase costs

The Office for National Statistics is using artificial intelligence to automate manual processes and help absorb the cost of delaying its new Labour Force Survey until 2027.

The ONS must continue running its existing survey alongside the replacement system, placing additional pressure on staffing and budgets. AI is already being considered for work such as scanning household receipts used in the Living Costs and Food Survey.

The reliability of labour-market information is important because the Bank of England uses employment, unemployment and inactivity data when assessing inflation and interest rates.

Industry & Investment

Pension providers support £1 billion Scale-Up Fund

Railpen, Nest, LPPI and other pension providers are exploring a £1 billion UK Scale-Up Fund in collaboration with the British Business Bank and the Office for Investment.

The fund would invest in high-growth British science and technology companies, helping them commercialise products, expand and create skilled employment.

Burnham described the proposal as a vote of confidence in British business. Chancellor John Healey said the UK creates successful companies but does not retain enough of their growth and profits.

AI Minister calls for dedicated visa route

AI Minister Kanishka Narayan has called for increased access to visas for highly skilled engineers. Proposals reportedly include a dedicated AI visa stream and reimbursement of visa costs for overseas recruits.

The aim is to help British technology companies retain more jobs, intellectual property and economic value in the UK.

The policy will need to balance access to international talent with investment in domestic technical education.

AstraZeneca profits rise by 18%

AstraZeneca reported an 18% year-on-year increase in profit for the April-to-June period, beating analysts’ expectations.

The company expects profits to continue growing during 2026 and sought to reassure investors that disappointing trial results for its Wainua heart-disease treatment would not undermine its long-term prospects.

Strong performance by major listed companies can support employment and supplier confidence across associated sectors, although smaller pharmaceutical and research businesses remain exposed to lengthy development cycles and funding risk.

LVMH revenue exceeds expectations

LVMH reported second-quarter revenue of €19.5 billion, ahead of forecasts. Demand from American consumers supported fashion and leather-goods sales after almost two years of stagnation.

Dior and Louis Vuitton performed particularly well. The results offered some reassurance for luxury retailers and their supply chains, although demand remains sensitive to consumer confidence and international travel.

Amazon proposes 5,000-satellite mobile network

Amazon has asked US regulators for permission to launch more than 5,000 satellites providing direct-to-device mobile services, including voice calls and messaging outside the reach of conventional mobile towers.

Amazon currently has fewer than 400 satellites in orbit, compared with more than 10,000 controlled by Starlink.

The proposed network could increase competition in remote connectivity and create opportunities for telecommunications and technology suppliers, although deployment will require substantial investment and regulatory approval.

Technology alliance promotes open AI for cybersecurity

Nvidia and other technology businesses have formed an alliance to promote secure and open AI tools for cybersecurity.

Members intend to share technical information about models, safeguards, research and security practices. The group argues that greater openness can help organisations respond to attacks more effectively.

For SMEs, accessible security tools could improve resilience, but businesses must still maintain strong access controls, staff training, backups and supplier checks.

International & Trade

UK reaffirms support for Ukraine

During a visit by President Volodymyr Zelensky, Burnham said the UK would honour every commitment made to Ukraine.

Britain will share technology intended to counter drone jamming and support efforts to secure a full and unconditional ceasefire with Russia.

Continued support for Ukraine may create opportunities in defence and technology supply chains, but geopolitical tension remains a source of energy, commodity and transport risk.

Severe wildfires affect France and Spain

French President Emmanuel Macron described the wildfires in south-west France as the country’s most difficult situation since the Second World War.

Bordeaux authorities were preparing for all eventualities as one fire burned approximately nine miles from the city. More than 320,000 people were reported to have been evacuated across France and Spain.

Ed Miliband takes UK World Bank seat

Foreign Secretary Ed Miliband has assumed responsibility for the UK’s position on the World Bank board.

He said international development would remain central to British policy, with climate change and poverty expected to be major priorities alongside development minister Kirsty McNeill.

Global Market Summary

Global markets were split between a severe sell-off in semiconductor shares and improving sentiment around US-Iran diplomacy, which pushed oil prices sharply lower.

UK and European markets

The FTSE 100 traded at 10,802.63, up 0.19%. Its relatively low exposure to semiconductor companies helped protect it from the technology sell-off, although Barclays fell sharply despite reporting stronger-than-expected results.

The STOXX Europe 600 rose 0.13% to 645.46, supported by luxury and aerospace shares.

The EURO STOXX 50 increased 0.16% to 6,291.99.

Germany’s DAX rose 0.48% to 25,483.05, outperforming neighbouring markets. Mercedes-Benz reported better-than-expected carmaking profitability but reduced its full-year revenue outlook because of weaker demand in China.

France’s CAC 40 rose 0.17% to 8,420.56, helped by LVMH’s results.

European semiconductor-equipment companies remained under pressure, but gains in luxury, aerospace and defence limited the wider decline.

United States

The S&P 500 closed at 7,413.18, broadly unchanged.

The Dow Jones closed at 52,210.08, after gaining more than 250 points (0.5%) during the session.

The Nasdaq Composite closed at 24,932.08, (down 0.18%) with semiconductor weakness offsetting gains elsewhere.

Investors are questioning whether the enormous sums being invested in AI infrastructure will produce profits quickly enough to justify current valuations. The Federal Reserve’s policy meeting has added further uncertainty, with markets assessing the possibility of another interest-rate increase.

Asia

South Korea was the centre of the semiconductor sell-off. The Kospi fell 10.84% to 6,023.66, triggering multiple circuit breakers. Samsung Electronics and SK Hynix suffered particularly severe losses.

Japan’s Nikkei 225 fell 3.95% to 62,364.92, with chip and technology companies leading the decline.

The Hang Seng rose 0.36% to 25,298.09, supported by commerce and technology stocks including NetEase.

China’s Shanghai Composite fell 1.16% to 3,813.32.

Australia’s ASX 200 rose 0.61% to 8,947.80 after the Reserve Bank of Australia governor stopped short of clearly signalling an imminent rate rise.

Semiconductor sell-off

Concerns about AI spending, valuations and increasing Chinese competition drove heavy losses across the chip sector.

Samsung Electronics and SK Hynix fell sharply, while Japanese semiconductor businesses and Taiwan’s TSMC also declined. ASML shares dropped more than 8% following reports that China had begun producing its own deep ultraviolet lithography equipment.

DUV machines are not the most advanced systems used in semiconductor production, but successful Chinese production would represent an important step towards reducing dependence on Western equipment.

Why it matters: Technology-market volatility can affect business investment, pension values, access to funding and confidence among suppliers serving the AI and semiconductor industries.

Currencies

GBP/USD traded near 1.3300.

EUR/GBP stood at 0.8548, indicating a somewhat stronger euro against sterling.

The dollar was broadly steady as the Federal Reserve began its policy meeting. The yen remained weak, with USD/JPY near 163.78, keeping intervention risk in focus.

Commodities

Brent crude traded at $85.96 a barrel, down 2.72%.

WTI crude traded at $80.80, down 2.19%.

Gold traded at $4,046.96 an ounce, down 0.72%.

Oil prices fell as the US and Iran moved towards talks and negotiations focused on reopening normal shipping through the Strait of Hormuz. Brent had already fallen sharply during Monday’s session as the geopolitical risk premium reduced.

Lower oil prices could ease fuel and transport costs for SMEs, but the situation remains highly sensitive to diplomatic progress.

Gold and silver also fell as demand for safe-haven assets eased.

Insolvency Watch

Administrations (5)

• B S P Labels Limited
• Elbec Limited
• JBOD Food Limited
• P. A. Smith (Contractors) Limited
• Red Sky Deliveries Ltd

Liquidations (6)

• Compleo Charging Solutions UK Limited
• Model Health Ltd
• Nick Bookbinder Associates Limited
• Northgate (Warwick) Developments Limited
• Paul McAllen & Co Limited
• Seamaw Limited

Winding-up Petitions (2)

• Asamanco Vehicle and Machinery Rental Ltd
• Smiling Jacks Ltd

Keeping cash moving while policy remains uncertain

Today’s news contains encouraging signs, including lower food inflation, potential investment in British growth companies and a stronger focus on technical skills. However, uncertainty over taxes, welfare reform, employment costs and interest rates continues to complicate business planning.

Businesses selling on credit should review customer limits, monitor changes in payment behaviour and act promptly when invoices become overdue. An apparently successful customer can still experience cashflow pressure when costs rise, investment falls or access to finance tightens.

CPA helps Members protect cashflow through CreditCare company reports, debtor monitoring, structured credit-control support and professional recovery of overdue accounts. CPA’s approach is ethical, considerate and focused on improving payment 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.

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