UK Business News Today: 29 July 2026 | Economy, Markets & Insolvencies

UK businesses are assessing another busy day of policy, employment and market developments. Proposals for a new social care contribution could increase employment costs and reduce household spending power, while higher inflation threatens to erode public spending and keep borrowing costs elevated. SMEs may benefit from new apprenticeship grants, but businesses must also manage risks from changing job markets, rising tax enforcement and renewed volatility in technology, energy and global markets.

James Salmon, Operations Director.

Key Developments

• Workers aged over 34 could face a new 1.8% social care contribution on earnings above £6,240.
• SMEs taking on apprentices could receive grants worth £8,000 under a new government scheme.
• UK household inflation expectations fell from 3.8% to 3.4%, ahead of the Bank of England’s interest-rate decision.
• Global technology shares remain under pressure as investors question the scale and returns of AI investment.
• Oil prices rebounded sharply after renewed Middle East tensions, increasing the risk of higher business transport and energy costs.

Tax & Government

Workers could face new social care contribution

Government officials have developed proposals for a mandatory social care contribution paid by workers over the age of 34. The proposed charge would be set at 1.8% of earnings above £6,240 and paid into a private fund intended to cover care costs later in life.

An employee earning £50,000 would pay approximately £788 a year, while someone earning £80,000 would pay around £1,327. Wealthier older people could also be required to fund between 10% and 45% of their care costs, depending on their assets.

The new system is estimated to cost £18bn a year.

HMRC recovers record unpaid tax from landlords

HMRC recovered more than £104m in unpaid tax from landlords during 2025–26 through the Let Property Campaign. A total of 11,511 landlords made disclosures after receiving HMRC “nudge letters”, the highest number since 2018–19.

Average payments exceeded £9,000. HMRC is increasingly using Land Registry and other datasets to identify property owners who may not have declared rental income correctly.

Some cases involved accidental landlords or misunderstandings surrounding allowable expenses and mortgage interest relief.

HMRC sends 1.8 million Simple Assessment letters

HMRC has begun sending around 1.8 million Simple Assessment letters to UK households. The letters notify recipients of tax due on income that has not been collected through PAYE or Self Assessment.

HMRC has urged recipients not to ignore the correspondence and to pay or challenge the calculation promptly where necessary.

Calls to restrict stocks and shares ISAs to UK investments

Standard Life chair Nicholas Lyons has called for stocks and shares ISAs to be restricted to UK investments. He argued that directing more household savings into British companies would strengthen domestic capital markets and support economic growth.

He also proposed an inheritance tax exemption for retail investors buying UK government bonds.

Heathrow allowed to recover early third-runway costs

The Civil Aviation Authority will allow Heathrow Airport to recover up to £320m spent on early planning and design work for its proposed third runway.

The money will be recovered through higher charges to airlines, which are likely to add around 15p to passenger ticket prices in 2028 and an estimated 30p in later years. Heathrow will also be permitted to recover £4.1m of costs incurred by the unsuccessful Heathrow West proposal.

The regulator said transparency, independent assurance and cost-efficiency safeguards would be introduced.

SME & Business Environment

Government offers apprenticeship grants to SMEs

Parents receiving benefits could be offered bursaries of up to £4,500 a year when their children begin apprenticeships. The scheme is intended to compensate families for Universal Credit reductions that can occur when a young person starts earning.

Alongside the parental bursaries, SMEs could receive grants worth £8,000 for each apprentice they employ. The measures would be funded through a £30m pot raised from the growth and skills levy.

Government seeks partnership with private sector

Business Secretary Jonathan Reynolds has said Prime Minister Andy Burnham wants to build a partnership with the private sector.

The comments are intended to reassure investors concerned that the Government’s support for greater public control in some sectors could lead to a less business-friendly environment.

Why it matters: Clear cooperation between government and business is important for investment confidence, but SMEs will judge policy on practical issues such as tax, regulation, employment costs and access to finance.

Higher inflation could reduce public spending by £24bn

The National Institute of Economic and Social Research has warned that higher inflation linked to the Iran conflict could cut the real value of UK public spending by £24bn by 2030.

NIESR said the Government faces high borrowing costs, new defence and household-support demands and limited room for additional debt-funded spending. It argued that new commitments should be funded through taxation or savings elsewhere.

Employment & Labour

AI reshapes UK employment market

Employment Hero data shows that construction employment increased by 2.1% in June, while manufacturing roles rose by 4.7%.

Traditional office-based employment is under greater pressure as AI adoption increases. Banking roles fell by 1.6% during June, with accountancy and other administrative professions also facing disruption.

Young graduates are increasingly considering vocational and technical careers as entry-level office opportunities become more limited.

Entain plans 500 job cuts following tax increase

Entain is planning to cut 500 jobs as it responds to higher UK gambling taxes and increased competition.

The online gambling tax rate rose from 21% to 40% in April, adding approximately £200m to the company’s annual costs. Entain aims to offset at least half of this increase through cost reductions.

The company reported adjusted net debt of £3.64bn at the end of 2025 and recently sold a 20% stake in its Central and Eastern European business for €425m.

Economy & Monetary Policy

Household inflation expectations fall

A Citi and YouGov survey found that UK households’ expectations for inflation over the next year fell to 3.4% in July, from 3.8% in June.

The decline came despite higher global oil and gas prices and may ease some concerns at the Bank of England ahead of its latest interest-rate decision.

Federal Reserve decision due today

The US Federal Reserve will announce its interest-rate decision today, followed by a press conference with Chair Kevin Warsh at 2.30pm Eastern Time.

Markets are divided over whether the Federal Reserve will hold rates or deliver an unexpected increase. The Bank of England will announce its own decision tomorrow.

AI boom complicates central-bank decisions

The Bank for International Settlements has warned that the AI investment boom is making monetary policy harder to calibrate.

AI may reduce inflation by improving productivity, but it can also increase inflation through heavy investment, infrastructure spending, electricity demand and competition for skilled labour.

Why it matters: Greater uncertainty around inflation and productivity could lead to more volatile interest-rate decisions, making financial planning and credit-risk assessment harder for SMEs.

Industry & Investment

Greggs reports stronger first-half profit

Greggs increased first-half pretax profit by 20% to £76m as revenue rose 7.2% to £1.10bn.

The result was supported by grocery-product growth and tight cost control. Greggs maintained its full-year guidance but expects second-half profit to decline year-on-year as investment in supply-chain capacity increases.

Lower-than-expected cost inflation should provide some support.

Sage revenue rises 11%

Sage reported revenue of £2.06bn for the first nine months of its financial year, an increase of 11%.

Sage Business Cloud revenue rose 15% to £1.76bn. The company continues to expect organic revenue growth above 9% for the full year, with further improvement in operating margins.

Coca-Cola raises sales forecast

Coca-Cola increased its 2026 sales forecast following strong demand linked to its sponsorship of the Football World Cup.

Second-quarter net income reached $4.43bn, and the company now expects sales growth of 5% for the year. Its shares have risen by 20% during 2026.

FIFA proposes $4.2bn tournament venture

FIFA has proposed raising $4.2bn by selling stakes in a venture designed to manage and commercialise its tournaments.

FIFA Forward Enterprise would be valued at around $20bn and would seek to increase revenue from broadcasting rights and sponsorships. FIFA’s member associations must approve the proposal.

UEFA criticised the plan, accusing FIFA of selling the “soul of football”.

UK companies reduce climate-reporting errors

Deloitte found that almost 70% of FTSE 100 companies adjusted climate or sustainability metrics during 2025, compared with around 50% in 2024.

However, error-driven restatements fell by 23%, suggesting companies are improving the quality of their reporting.

The findings come ahead of wider mandatory climate-reporting requirements for listed UK companies.

International & Trade

US bans imports of humanoid robots

The United States has banned imports of certain humanoid robots, citing national-security concerns.

The Federal Communications Commission said advanced robotic devices, most of which are manufactured in China, could potentially be used to surveil Americans. The regulator also blocked foreign-made power inverters used in data centres and solar installations.

China has not yet responded but has previously accused the US of politicising trade.

SK Hynix profit surge fails to reassure investors

SK Hynix reported second-quarter profit of 60.5trn won, equivalent to approximately $41.6bn, an increase of 557% year-on-year.

Despite the sharp rise, the result fell below market expectations. The company also increased planned AI spending by 50% to at least 45trn won, raising concerns about the cost and future returns from AI investment.

Its shares fell by around 9%.

Retail & Consumer

Greater Manchester prepares for major mayoral by-election

More than 2 million people are eligible to vote in Thursday’s Greater Manchester mayoral by-election, the largest by-election of its kind in the UK.

The contest follows Andy Burnham’s move to become Prime Minister. A poll published on Tuesday placed Labour candidate Bev Craig on 39%, Reform candidate Sian Astley on 19% and Green candidate Geraldine Coggins on 14%.

The result will be closely watched as an early test of the new Prime Minister’s political support.

Weather and Business Conditions

Bright sunshine is expected across southeast England, with light cloud and sunny spells elsewhere. London could reach 34°C, with an overnight low of 17°C, while Belfast and Edinburgh may experience light rain.

Businesses should consider additional breaks, hydration and ventilation for employees working outdoors, in warehouses or in poorly ventilated premises. Hot weather can also increase refrigeration, cooling and transport costs.

Global Market Summary

Global markets are being driven by three competing forces: a sharp correction in AI and semiconductor shares, stronger results from companies outside the technology sector and renewed geopolitical tension in the Middle East.

European shares remained relatively resilient, helped by the region’s lower exposure to high-growth chip stocks. US markets showed a clear rotation away from technology into insurers, defensive businesses and cyclical companies. Asian markets experienced the most severe losses, particularly in South Korea, where semiconductor shares fell heavily.

UK and European markets

The FTSE 100 stood at 10,930.97, up 0.55%, supported by its relatively low technology weighting and strong corporate results.

The STOXX Europe 600 was broadly unchanged at 647.02, up 0.02%.

The Euro STOXX 50 fell 0.30% to 6,270.42.

Germany’s DAX rose 0.16% to 25,504.70, while France’s CAC 40 gained 0.08% to 8,465.54.

Unilever was among the strongest UK performers after better-than-expected sales and improved guidance. Barclays announced a £1bn share buyback, although weakness in fixed-income trading limited the market response.

European sentiment remained cautious ahead of the Federal Reserve decision and amid renewed losses in Asian semiconductor shares.

United States

The S&P 500 closed at 7,428.78, up approximately 0.2%.

The Dow Jones Industrial Average rose around 1% to 52,747.32, supported by defensive and cyclical businesses.

The Nasdaq 100 fell around 1% to 27,763.13 as semiconductor shares came under further pressure. The Philadelphia Semiconductor Index fell 4.5%, with investors increasingly questioning whether the returns from large AI investments will justify current valuations.

The equal-weighted S&P 500 reached a record high, demonstrating that gains were spreading beyond the largest technology companies.

Asian markets

Japan’s Nikkei 225 fell 1.49% to 61,434.19, led lower by semiconductor and AI-related shares.

Hong Kong’s Hang Seng rose 1.94% to 25,800.75, supported by financial stocks and gains in Chinese electric-vehicle companies.

South Korea’s KOSPI experienced severe volatility, falling by as much as 13% during trading before recovering some losses. Circuit breakers were triggered for a second consecutive day.

The sell-off followed disappointing market reactions to SK Hynix’s results and rising concerns over the cost of AI investment.

Market drivers

AI and semiconductor selling: Investors are reassessing whether exceptionally high spending on AI infrastructure will produce adequate returns. Even very strong earnings are failing to meet elevated expectations.

Federal Reserve decision: Markets expect the Federal Reserve to hold rates, although some investors see a meaningful possibility of an increase. Any surprise could affect currencies, borrowing costs and global risk appetite.

Middle East tensions: Oil prices rose sharply after the US military reported intercepting an Iranian attack on American forces. Further attacks on Saudi energy infrastructure have increased concerns about supply disruption.

Corporate earnings: Results from Unilever, Coca-Cola, Ford, Barclays, Rio Tinto and other major companies provided support outside the technology sector.

Currencies

GBP/USD: Sterling traded around $1.3300, edging higher ahead of the Federal Reserve decision.

GBP/EUR: With EUR/GBP at approximately 0.8569, one pound bought around €1.1670.

The dollar remained within a narrow range as investors avoided major positions before the Federal Reserve announcement.

Commodities

Brent crude: Approximately $87.14 a barrel, rising around 4% overnight after renewed Middle East tensions.

WTI crude: Approximately $81.99 a barrel, rebounding sharply from Tuesday’s lows.

Gold: Approximately $4,040.07 an ounce, supported by safe-haven demand and uncertainty around interest rates and geopolitics.

Oil had previously experienced its largest three-day decline since April 2020 as diplomatic discussions raised hopes of reduced disruption in the Strait of Hormuz. The overnight escalation reversed part of that fall.

OPEC+ is also reportedly planning to pause quota increases after September, with further negotiations required before 2027 production quotas can be agreed.

Insolvency Watch

Administrations (3)

• 42 BLUEBELL WAY LTD
• EVENT TRAFFIC CONTROL LTD
• HORGAN HOMES (MAREHAM LE FEN) LTD

Liquidations (11)

• ALEX ROCKE CONSULTING LIMITED
• ALPHA EDGE LTD
• ARCHITECTURAL FACADE SOLUTIONS LIMITED
• CANADIAN SUPERIOR OIL (U.K.) LIMITED
• CIRCLE TRADE EUROPE LTD
• FETCH FILMS LTD
• PRIVILVEST LIMITED
• SALTWIND LIMITED
• STEVAL LIMITED
• THE DAILY BRICK LTD
• THRUSTER CONSULTING LIMITED

Protecting cashflow through policy and market uncertainty

Today’s news combines potential tax increases, volatile energy prices, shifting employment patterns and continued uncertainty over interest rates. Each of these developments can affect how quickly customers pay and how much working capital they have available.

Businesses selling on credit should review customer limits, monitor changes in trading behaviour and act quickly when invoices become overdue. A customer experiencing higher wage costs, tax liabilities or financing pressure may begin extending payment times before more visible signs of financial difficulty appear.

CPA helps businesses strengthen credit control through CreditCare company reports, debtor monitoring, overdue account recovery and structured payment follow-up. Our approach is professional, ethical and 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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