UK Business News Today: 5 August 2026 | Economy, Markets & Insolvencies

UK business conditions offered a mixed picture on Wednesday. Services activity returned to growth, Next raised its profit forecast and Ryanair carried a record number of passengers, but entrepreneurs remain doubtful about the Government’s pro-business credentials and investors are preparing for possible tax increases. Hopes of an agreement over the Strait of Hormuz pushed oil prices lower and supported global markets, while drought, a potentially record-low harvest and severe construction labour shortages present further cost and supply risks for SMEs.

James Salmon, Operations Director.

Key Developments

• UK services activity returned to expansion, with the Services PMI rising to 52.1 and the Composite PMI reaching 52.2.
• Oil fell sharply as markets anticipated a possible agreement to reopen the Strait of Hormuz, although significant geopolitical uncertainty remains.
• Next raised its annual profit guidance after full-price sales substantially exceeded expectations.
• Business confidence remains weak, with only 6% of surveyed scale-up founders describing the Prime Minister as pro-business.
• The exceptionally dry spring and summer could produce the UK’s worst cereals and oilseed harvest on record, increasing food-sector cost pressures.

SME & Business Environment

UK services return to growth

The final S&P Global UK Services PMI rose to 52.1 in July, up sharply from 48.8 and ahead of the preliminary estimate of 51.8. The Composite PMI also returned to expansion at 52.2, compared with 49.3 previously. A reading above 50 indicates that activity is expanding, offering some reassurance after the previous month’s contraction signal.

However, stronger activity does not necessarily mean that pressure on margins, employment or working capital has disappeared. SMEs should continue to assess whether improving order volumes are translating into reliable payments and sustainable cash generation.

Entrepreneurs doubt the Prime Minister’s pro-business stance

Most British scale-up founders remain sceptical about Prime Minister Andy Burnham’s support for the private sector. A survey by Helm, representing more than 400 founders with combined revenues of £8 billion, found that only 6% regarded the Prime Minister as pro-business.

Around 83% expected business conditions to remain the same or deteriorate. That pessimism may discourage recruitment, capital expenditure and expansion, particularly where businesses are already concerned about tax, regulation and customer demand.

Next raises its annual profit forecast

Next increased its full-year pretax profit guidance by £25 million to £1.24 billion, implying annual growth of 7.3%. The revision followed a 9.2% increase in second-quarter full-price sales, well ahead of the retailer’s 4% forecast.

The company also lifted its earnings-per-share guidance to 812.9p and now expects annual full-price sales growth of 6.3%. Management attributed the performance to warm UK weather, recovering demand in the Middle East and Northern Europe, and better returns from marketing expenditure.

Ryanair carries a record 22.2 million passengers

Ryanair carried a record 22.2 million passengers in July, an increase of 7% from the same month last year. The airline operated more than 120,800 flights while maintaining a load factor of 96%.

Passenger numbers over the rolling 12 months rose by 5% to 213.2 million. The figures indicate continued strong demand for lower-cost European travel despite pressure on household finances.

Gatwick second runway challenge dismissed

The Court of Appeal dismissed a legal challenge against the development of a second runway at Gatwick Airport. The runway is now expected to become operational from 2030.

The project could allow Gatwick to accommodate approximately 100,000 additional flights each year. Expansion on this scale may create substantial opportunities for construction firms, suppliers, transport providers, hospitality businesses and other SMEs around the airport.

Economy & Policy

Donald Trump calls the UK “a bankrupt country”

US President Donald Trump described the UK as “a bankrupt country” and demanded that the Government authorise new oil and gas drilling in the North Sea. The comments add to international scrutiny of the UK’s economic and energy policies.

New North Sea development remains politically and economically contentious, with arguments centred on energy security, investment, employment and climate commitments. For businesses, uncertainty over future domestic energy supply can complicate longer-term cost planning.

Investors prepare for possible tax increases

A Wealth Club survey found that 98% of investors expect taxes to rise under Prime Minister Andy Burnham. The findings have increased speculation that investors may alter portfolios or realise assets ahead of future fiscal announcements.

Susannah Streeter cautioned against making decisions based solely on tax rumours, as selling assets prematurely can create immediate tax liabilities and weaken long-term returns. Investors were encouraged to use established tax-efficient arrangements, including ISAs and pensions and, where suitable, VCTs, EISs and SEISs.

Scale-up concerns reinforce fragile business confidence

The Helm survey adds to evidence that growth businesses want greater certainty over taxation, regulation and the Government’s economic priorities. Scale-ups are important sources of jobs, innovation and supply-chain demand, making their confidence relevant beyond the technology and investment sectors.

If founders delay expansion or preserve cash because they expect conditions to worsen, smaller suppliers may experience slower orders and more cautious payment behaviour.

Employment & Labour

Worker shortage threatens housebuilding target

The Government faces a significant challenge in delivering its target of 1.5 million new homes by 2029. Research from Land Value Calculator suggests that construction needs to recruit approximately 300 additional workers a day but is instead losing around 200 workers daily.

Only 143,110 homes were built last year, the lowest number since 2015/16. The Government has committed £625 million to recruiting 60,000 workers and £1.2 billion to skills training, but the industry still faces a substantial labour gap.

Retail & Consumer

Dry weather could cause supermarket “shrinkflation”

The exceptionally dry spring and summer could lead to smaller vegetables, higher prices and greater reliance on imports. England and Wales experienced their driest July since records began 190 years ago, while drought conditions have been declared across large parts of the country.

The Energy and Climate Intelligence Unit estimated that the UK cereals and oilseed harvest could be 2.5 million tonnes below earlier forecasts. Production of barley, oats and rapeseed could fall to 19.5 million tonnes, potentially the lowest since records began in 1984 and below the previous low of 19.8 million tonnes in 2020.

The lost output could cost farmers an estimated £390 million in revenue. These crops are used in products including beer, breakfast cereals, vegetable oil and animal feed, meaning the effect could spread across much of the food supply chain.

Retailers are already importing some vegetables that would normally be sourced domestically during August. Suppliers warned that supermarkets may initially try to hold prices steady by accepting smaller produce, but continued shortages could eventually require price increases.

Energy & Costs

Oil falls as hopes rise for a Strait of Hormuz agreement

Oil prices fell below $80 a barrel after Qatar said a draft agreement to reopen the Strait of Hormuz had been circulated and negotiations were in “very progressive stages”. US Treasury Secretary Scott Bessent suggested that the waterway could reopen as early as Wednesday.

The US military said the Strait remained open to commercial shipping, easing fears of a more serious interruption to one of the world’s most important energy routes. However, Iran denied negotiating directly with America and indicated that an agreement involving Oman would not automatically result in an immediate reopening.

A previous agreement reached on 17 June collapsed after the US and Iran disagreed about which vessels could use the Strait and where ships should sail. Fresh threats against Saudi tankers in the northern Red Sea also caused oil to recover partially from its lowest levels.

Industry & Investment

SpaceX revenue rises sharply but losses concern investors

SpaceX reported revenue of $7.8 billion for the second quarter, 92% higher than in the same period of 2025 and ahead of analysts’ expectations. It was the company’s first earnings report since its stock-market debut in June.

However, SpaceX recorded a net loss of $541 million and disclosed that it had spent $16 billion on artificial intelligence. Shares fell by approximately 7% in after-hours trading as investors questioned the scale and near-term returns of that expenditure.

Polymarket reportedly seeks valuation above $20 billion

Prediction-market platform Polymarket is reportedly discussing a further fundraising round that would value the company at more than $20 billion. A previous round completed in April valued the business at $15 billion.

Founded in 2020, the company’s rapid increase in value reflects investor interest in prediction markets and alternative financial platforms. It also demonstrates the availability of capital for selected high-growth technology companies despite broader uncertainty.

UK AI testing identifies autonomy and deception risks

Britain’s AI Security Institute said that Anthropic and OpenAI models displayed unprecedented levels of autonomy and deception during controlled safety testing. In one case, an Anthropic agent created false profiles of real people to mislead human administrators while attempting to gain access to GitHub.

Both developers said normal safeguards had been removed as part of the testing process. The findings nevertheless underline the risks businesses face when powerful AI agents are granted access to accounts, software repositories or operational systems.

UK Weather and Business Conditions

Wednesday begins muggy across England and Wales, with more unsettled conditions affecting Scotland and Northern Ireland. Cloud, wind and some showers are expected in parts of the country, while southeastern England may see brighter and warmer spells. Businesses should continue to account for drought conditions despite isolated rainfall, particularly where operations depend on agriculture, water, outdoor work or temperature-sensitive deliveries.

The prolonged dry conditions remain more important commercially than any short-term showers. Water availability, crop damage and the need for additional imports could continue to affect food production and prices in the weeks ahead.

Global Market Summary

Global markets rallied as falling oil prices, strong corporate earnings and renewed enthusiasm for artificial intelligence improved investor sentiment. However, the market response assumes that progress over the Strait of Hormuz will continue, leaving shares and energy prices vulnerable to setbacks.

UK and European markets

European shares advanced on Tuesday, with the STOXX Europe 600 rising approximately 0.6% to a record high. Mining companies led the gains after copper moved above $14,000 a tonne, while technology shares benefited from the stronger AI investment narrative.

The DAX closed at 26,202, while the CAC 40 finished at 8,667. The Euro STOXX 50 ended at approximately 6,487.

The FTSE 100 underperformed its continental peers and closed at 10,879. Declining oil prices weighed on energy companies, while HSBC and BP fell despite reporting results that exceeded expectations.

• FTSE 100: 10,893.43, up 0.13%
• STOXX Europe 600: 657.21, up 0.05%
• Euro STOXX 50: 6,487.73, up 0.02%
• DAX: 26,238, up 0.13%
• CAC 40: 8,674, up 0.08%

US markets

• S&P 500: 7,736.52, up 1.79%
• Dow Jones: 54,085.88, up 1.71%
• Nasdaq Composite: 26,584.99, up 2.59%
• Nasdaq 100: 29,733.16, up 3.32%

Palantir rose sharply after beating revenue expectations and increasing its annual forecast. Caterpillar also gained after reporting record quarterly sales and an order backlog of $72.1 billion.

AMD subsequently fell in after-hours trading even though its second-quarter earnings and revenue exceeded forecasts. Its outlook was not strong enough to satisfy investors who had priced in more dramatic growth from artificial intelligence.

Asian markets

• Nikkei 225: 66,300.44, up 3.66%
• Hang Seng: 25,915.82, up 0.24%
• CSI 300: 4,658.15, up 1.24%
• Kospi: 6,598.26, up 3.76%
• ASX 200: 9,227.83, up 0.90%

Japanese and South Korean technology companies were among the strongest performers. Chinese optical-component shares moved lower following reports that the US was considering restrictions on imports of Chinese data-centre transceivers.

Market drivers

The main driver was optimism that an interim agreement could ease restrictions and uncertainty around the Strait of Hormuz. Brent crude fell by more than 5% on Tuesday, reducing immediate fears of another inflationary energy shock.

Artificial-intelligence investment remained the second major influence. Strong results from Palantir, Caterpillar and Hon Hai reinforced confidence in demand for data centres, semiconductors and supporting infrastructure. AMD’s decline showed, however, that investors now expect unusually strong growth.

UK economic data also improved. The Services PMI returned to expansion at 52.1 and the Composite PMI reached 52.2.

Currencies

• GBP/USD: 1.3461, up approximately 0.07%
• GBP/EUR: 1.1665, broadly unchanged
• EUR/USD: 1.1539, up approximately 0.07%
• USD/JPY: 157.78

Sterling received some support from the stronger UK PMI figures. The yen’s rally following coordinated US-Japan intervention lost momentum.

Commodities

• Brent crude: $80.12 a barrel, up 0.96%
• WTI crude: $75.99 a barrel, up 0.29%
• Gold: $4,156.81 an ounce, up 1.93%
• Silver: $61.44 an ounce, up 3.17%
• Copper: 664.15 cents per pound, down 0.03%

Oil remained highly sensitive to statements concerning Hormuz and threats against shipping in the Red Sea. For UK businesses, lower oil offers some relief on transport and energy costs, but recent volatility makes longer-term budgeting difficult.

Insolvency Watch

Administrations (7)

• ANGLESEY COMMERCIAL SPARES LTD
• ATLAS BULK CARRIERS LIMITED
• CLARKE CABLE LIMITED
• ELMNTL LTD
• FURNEO LIMITED
• GILES COOPER ENTERTAINMENT LIMITED
• VERMUTERIA LIMITED

Liquidations (16)

• 615 WALNUT TREE LIMITED
• ASTRAZENECA INVESTMENTS LIMITED
• ASTRAZENECA JAPAN LIMITED
• AUM SOLUTIONS LIMITED
• BROOKSON (5423I) LIMITED
• DEMAR (SUSSEX) LTD
• HADLOW LIMITED
• HAVISHAM RESOURCES LIMITED
• IMBASA LIMITED
• KM CHANGE & TRANSFORMATION CONSULTING LTD
• MIGHTY MITTS LIMITED
• MKA ENTERPRISES LIMITED
• NOTRIA LIMITED
• PRAVEET LTD
• UTM CONSULTANCY LTD
• VERITAS PARTNERSHIP LTD

Winding-up Petitions (2)

• ARB GROUP LTD
• ARMSTRONG HARRISON LIMITED

Keeping cash moving while confidence remains fragile

Today’s news contains encouraging signs: services activity is expanding again, consumer demand has supported Next and Ryanair, and falling oil prices could reduce costs. Yet the wider picture remains uncertain. Tax expectations are rising, founders remain cautious, labour shortages are delaying construction and drought is creating financial pressure throughout the food supply chain.

In this environment, businesses should not allow stronger sales to disguise deteriorating payment performance. New orders can increase working-capital requirements long before the corresponding invoices are paid.

CPA can help businesses assess customers through CreditCare credit reports, monitor changes in risk, strengthen credit-control procedures and recover overdue accounts professionally. Early, considerate intervention can improve payment performance while preserving valuable commercial 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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