UK Business News Today: 6 August 2026 | Economy, Markets & Insolvencies

Britain’s economy is showing tentative signs of improvement, with services activity and new orders returning to growth and the construction downturn easing. However, a 22-month decline in private-sector employment, persistent housing pressures, rising tax concerns and uncertainty over government borrowing suggest that many businesses and households remain cautious. For SMEs selling on credit, the mixed picture reinforces the importance of monitoring customers closely, controlling exposure and acting promptly when invoices become overdue.

James Salmon, Operations Director.

Key Developments

• UK services returned to growth in July, but private-sector employment fell for a 22nd consecutive month.
• Construction activity remained in contraction, although the sector’s PMI improved sharply from June.
• Housing developers face weak demand, higher finance costs and rising construction expenses.
• Tax uncertainty is influencing decisions by banks, investors, homeowners and business owners.
• Global markets remain sensitive to Middle East diplomacy, interest-rate expectations and concerns over the cost of AI investment.

Economy & Policy

Services sector returns to growth but job cuts continue

Britain’s services sector returned to growth in July as new orders and business confidence improved. The S&P Global UK Services PMI rose from 48.8 in June to 52.1, moving above the 50 level that separates growth from contraction for the first time since April. The broader composite PMI, covering services and manufacturing, increased from 49.3 to 52.2.

Despite the improvement, service-sector employment declined for a 22nd consecutive month. Companies continue to reduce staffing costs, while some report that investment in artificial intelligence has reduced their need for employees. The duration of the services employment downturn now matches the slump recorded during the 2008–09 financial crisis, although the pace of job losses eased in July.

Why it matters: Growth without stronger employment may limit household spending and leave businesses facing customers that remain cautious about committing to purchases or paying invoices promptly.

UK construction downturn eases

The S&P Global UK Construction PMI rose to 44.7 in July, up sharply from 38.4 in June and ahead of the 40.0 market forecast. The reading remains below 50, meaning construction activity continued to contract, but the decline was materially less severe than during the previous month.

The improvement offers some encouragement after an exceptionally weak period for the sector. However, subdued development activity, high borrowing costs and rising material and labour expenses continue to affect contractors and businesses throughout construction supply chains.

Why it matters: Businesses supplying construction companies on credit should remain alert to delayed projects, tighter working capital and slower payment across contractor and subcontractor networks.

Britain’s housing target faces growing pressure

Inflation linked to the conflict in Iran has kept interest rates elevated, weakening housing demand and increasing finance costs. Developers are also facing higher construction expenses, contributing to slower building activity.

Britain’s largest residential developers issued eight profit warnings during the first half of 2026, matching the number recorded at the beginning of the global financial crisis. Vistry has been particularly affected, with its shares falling substantially and first-half home sales declining 11% to 6,100.

The pressures facing developers make the Government’s pledge to deliver 1.5m new homes before the next general election in 2029 increasingly difficult to achieve.

Why it matters: Weak housebuilding affects a broad network of SMEs, including contractors, material suppliers, tradespeople and professional services firms that often provide substantial credit terms.

Persimmon reports higher profit and completions

Persimmon reported a 15% increase in first-half revenue to £1.73bn, while pretax profit also rose 15% to £168m. New-home completions increased by 13% to 5,189, and the interim dividend was maintained at 20p per share.

The company retained its 2026 growth outlook despite continued affordability pressures in the housing market. However, it warned that build-cost inflation may increase during 2027, partly because of the conflict in Iran.

First-time buyers turn to tracker mortgages

Moneyfacts data shows that 31.3% of first-time buyers are considering tracker or variable-rate mortgages, compared with only 9.5% in February. Tracker products follow the Bank of England base rate and often allow borrowers to leave without early repayment charges.

Rising fixed mortgage rates are encouraging buyers to consider more flexible alternatives. However, tracker borrowers remain exposed to further increases in the Bank Rate and may see monthly payments rise if monetary policy tightens.

Experts question Chancellor’s borrowing plans

Analysts have warned that investors may be concerned by Chancellor John Healey’s reported plan to increase borrowing by £9bn a year to support infrastructure, housing and business investment. The additional spending may fit within the Government’s fiscal rules if it is classified as investment in assets rather than day-to-day expenditure.

However, Richard Carter of Quilter warned that borrowing remains borrowing regardless of how it is classified. Oliver Faizallah of Raymond James said the Government will need to demonstrate that the projects generate genuine economic returns and communicate its plans clearly to prevent nervousness in bond markets ahead of the Budget.

Burnham considers Crossrail-style funding for HS2 Manchester leg

Prime Minister Andy Burnham is considering ways to revive the Manchester section of HS2 as part of efforts to improve regional connectivity. Mark Haase, chief executive of Crewe-based SG World, said inadequate rail links make it harder to attract employees and constrain the company’s potential growth.

One option is a funding model similar to London’s Crossrail, which raised around half its cost locally through development levies and business contributions. However, the approach may face resistance from companies concerned about additional costs and from landowners affected by development plans.

Tax & Government

Citigroup chief warns UK taxes could deter investment

Citigroup chief executive Dame Jane Fraser has warned that the tax burden faced by banks in Britain is significantly higher than in competing financial centres such as New York, Frankfurt and Paris. Banks pay the standard 25% corporation tax rate as well as a 3% corporation tax supplement.

UK Finance estimates that the total tax rate for banks reaches approximately 46.4% when VAT, National Insurance and other levies are included. Fraser acknowledged London’s strengths but warned that international investment could move elsewhere if the UK becomes less competitive, saying that “money votes with its feet”.

Tax is the leading concern for Britain’s millionaires

A Wealth Club survey found that higher taxes are the main concern for 49% of Britain’s millionaires. Future government policy concerned 26%, while only 9% regarded geopolitical events as their greatest threat.

Inheritance tax was the most frequently cited individual tax concern, followed by the possible introduction of a wealth tax and higher capital gains tax. Almost all respondents expected taxes to rise over the next year, while 63% anticipated higher inflation and nearly six in ten expected the Bank of England to increase interest rates.

London councils challenge mansion tax proposal

Council leaders in Kensington and Chelsea, Wandsworth, Richmond and Westminster have urged the Chancellor to reconsider the proposed mansion tax. The councils estimate that households in the four boroughs could collectively face annual charges of around £270m.

From 2028, owners of homes worth more than £2m could face yearly charges ranging from £2,500 to £7,500. Council leaders argue that the measure may affect long-term homeowners and pensioners who are asset-rich but do not have sufficient income to meet the annual charge.

Life insurance demand rises before pension tax changes

Demand for life insurance has increased as families prepare for planned inheritance tax changes affecting unused pension savings. From April 2027, pension pots and death benefits are expected to form part of an estate for inheritance tax purposes.

Royal London said people with substantial pension savings, including many small-business owners, are increasingly seeking financial advice. Life insurance may be recommended to cover future tax liabilities and reduce the risk that families have to sell a business or other assets to pay a tax bill.

Pension tax changes weaken saver confidence

A Standard Life survey found that 22% of adults have less confidence in pensions as a retirement savings vehicle after learning that unused pension pots will become subject to inheritance tax from April 2027.

Most estates are still expected to remain outside the inheritance tax system. However, the proportion paying the tax is forecast to increase from around 4–5% currently to approximately 7% once pension wealth is included.

Fast-track visa scheme extended to UK companies

AstraZeneca, Jaguar Land Rover and more than 100 other UK companies will be able to use the Global Talent Visa to recruit highly skilled overseas workers. The scheme was previously available mainly to universities and research institutions.

The visa costs £766, with decisions usually made within three weeks, and offers fewer restrictions than several other immigration routes. The Government hopes the expansion will attract researchers and technical specialists who may be discouraged from moving to the United States following tighter immigration policies there.

Industry & Investment

UK car sales rise as electric vehicles gain market share

Britons registered 156,500 new cars in July, an increase of 11.7% from a year earlier and the strongest July since before the pandemic. Fully electric vehicles accounted for 27.5% of registrations.

A total of 43,106 electric vehicles were registered, representing a year-on-year increase of 44.5%. The Society of Motor Manufacturers and Traders called for urgent regulatory reform to improve the competitiveness of Britain’s automotive manufacturing industry.

Uber and Wayve receive London robotaxi permits

Transport for London has granted private-hire licences allowing Uber and Wayve to carry passengers in autonomous vehicles. Up to 15 vehicles can operate during a one-year trial, with a safety supervisor remaining inside and able to intervene.

People who registered an interest are expected to be offered rides this summer. Fully unmanned operation will require further approval, while Waymo and Baidu are also preparing to introduce autonomous services in London.

Raleigh owner begins insolvency proceedings

Accell, the Dutch company that owns Nottingham bicycle brand Raleigh, has begun insolvency proceedings after concluding that it can no longer meet its financial obligations. Accell bought Raleigh in 2012 for $100m.

Raleigh had already undergone redundancies and subsequently reported losses of £30m. Accell said it had exhausted realistic restructuring options and would work with court-appointed administrators to preserve viable operations and employment where possible.

FIFA president apologises over failed investment proposal

FIFA president Gianni Infantino has acknowledged that mistakes were made over a proposal to sell stakes in football tournaments to private investors. The plan was developed without first consulting national football associations.

Infantino apologised to FIFA members but said he intended to remain president. He also stated that the governing body would no longer tolerate criticism of its governance.

UK Weather Outlook

Conditions across the UK are mixed today. The Met Office’s 10am readings ranged from approximately 17°C in Aberdeen, Glasgow, Liverpool and Newcastle to 20°C in Cardiff and 21°C in London. London and the South East are forecast to remain largely dry with sunny intervals and temperatures around 22°C, before warmer conditions develop into the weekend.

Global Market Summary

Global markets are trading cautiously as investors balance optimism over a possible agreement to improve shipping through the Strait of Hormuz against uncertainty over US interest rates and the cost of artificial-intelligence investment. European shares opened modestly higher, while Asian technology markets weakened following disappointing guidance from major data-storage companies.

UK and European markets

The FTSE 100 stood at 10,903.14, up 0.14%, after closing the previous session at 10,888.30. The STOXX Europe 600 rose 0.32% to 659.22, while the Euro STOXX 50 gained 0.39% to 6,502.40.

Germany’s DAX was broadly unchanged, down 0.02% at 26,122.26, as a sharp decline in Siemens offset wider gains. France’s CAC 40 rose 0.66% to 8,726.21.

During Wednesday’s session, HSBC, Standard Chartered and Prudential were affected by concerns that China was extending tax collection to returns from overseas insurance products. Miners performed more strongly, while Next gained after raising its profit forecast.

United States

The S&P 500 closed 0.17% lower at 7,723.55, while the Nasdaq Composite fell 0.83% to 26,363.44. The technology-heavy market was affected by concerns over the scale and sustainability of artificial-intelligence spending.

The Dow Jones Industrial Average gained 0.49% to a record 54,349.12, supported by financial shares. The Russell 2000, which contains more domestically focused smaller companies, declined 0.59% to 3,019.19.

US markets had initially moved higher but reversed after hawkish central-bank comments increased expectations that interest rates could rise. Investors are now focused on Friday’s US employment report for further signals about the Federal Reserve’s next move.

Asian markets

Asian markets were mostly weaker. Japan’s Nikkei 225 fell 0.93% to 65,683.26, while Hong Kong’s Hang Seng dropped 1.57% to 25,507.84.

South Korea’s KOSPI declined 4.58% to 6,296.38 as semiconductor and memory-storage companies came under pressure. By contrast, China’s Shanghai Composite increased 0.57% to 3,900.35, while Australia’s ASX 200 gained 0.47% to 9,271.61.

Market drivers

The Strait of Hormuz remains the most important geopolitical influence on markets. Iran and Oman were reported to be close to finalising a shipping proposal, but the absence of formal US confirmation left investors cautious.

Interest-rate expectations also remain influential. Comments from Federal Reserve officials indicating that rates may need to rise have weighed on growth companies and strengthened the market’s focus on forthcoming US labour-market data.

Artificial-intelligence investment is producing mixed signals. Demand for data centres and storage remains strong, but high capital expenditure at SpaceX and weaker forward guidance from Sandisk and Western Digital have prompted investors to question how quickly companies can earn returns on large AI investments.

Currencies

Sterling was broadly stable. GBP/USD stood at 1.3463, down 0.04%.

GBP/EUR rose 0.04% to 1.1662. The dollar index was little changed at 99.74 as traders avoided major currency positions before the US employment report.

Commodities

Brent crude traded at approximately $79.85 a barrel, up 0.50%, while West Texas Intermediate stood at $75.40, up 0.24%. Oil remains considerably below the levels seen before expectations grew that shipping conditions through the Strait of Hormuz could improve.

Gold extended its strong rally, reaching approximately $4,267.49 an ounce after rising more than 4% during the previous session. Demand has been supported by central-bank buying, geopolitical uncertainty and expectations around US monetary policy.

Silver traded at $61.83 an ounce, down 0.35%, while three-month copper was broadly unchanged at $14,110.50 a tonne.

What the markets mean for UK businesses

Lower oil prices would reduce some pressure on transport, production and supply-chain costs. However, the outlook remains highly sensitive to developments in the Middle East.

Expectations that interest rates could remain high—or increase—mean businesses should avoid assuming that borrowing costs will fall quickly. Companies should stress-test cashflow against higher finance costs, weaker customer demand and slower settlement of invoices.

Insolvency Watch

Administrations (5)

• DEERNS UK LIMITED
• GINGER TREE PAYROLL LIMITED
• SOUTHERN TRIDENT LIMITED
• THE HARVEY HOMES GROUP LTD
• WE ARE DATA HAWKS LTD

Liquidations (15)

• AL DARWISH CONSULTING LTD
• AMBER HOMELOANS LIMITED
• BLUNDELL BIOSCIENCE RUSHMOOR LIMITED
• CHAPPIE LIMITED
• COEUS RISK MANAGEMENT LIMITED
• FARRIER’S TOOLS LIMITED
• FTN TRADING LIMITED
• GASKELLINC LIMITED
• GOCLOUD TECHNOLOGIES LTD
• KEYHAVEN HOMES SKIPTON LTD
• MANNING PROPERTIES WIMBORNE LIMITED
• MILNROW INVESTMENTS LIMITED
• MORTGAGES 2 LIMITED
• SAFETY INFORMATION SYSTEMS LIMITED
• ZENCHECK.AI LTD

Winding-up Petitions (10)

• A D INTERIOR SOLUTIONS LIMITED
• BETTER CARE LONDON LIMITED
• FLEXY CARS LTD
• FUNKIN LOVELY ENTERTAINMENTS LTD
• GILMARTIN TRAFFIC MANAGEMENT LIMITED
• IP NRG SOLUTIONS LIMITED
• MAR KEBAB LTD
• MARTIN HOLMES ENGINEERING LIMITED
• MEDWAY AIR SERVICES LTD
• NELLY-JAY COMPANY LIMITED

Protecting cashflow through mixed economic signals

Today’s figures show why improving economic activity should not be mistaken for the end of financial pressure. Services are growing again, but businesses are still reducing staff. Construction remains in contraction, housing developers face higher costs and tax and borrowing uncertainty continue to influence confidence.

For businesses selling goods or services on credit, the financial health of a customer can change before it becomes visible through missed payments. CreditCare reports can help you assess new and existing customers, while debtor monitoring provides early warning of changes that may affect payment performance.

When invoices become overdue, early action is essential. CPA helps Members follow a clear, professional credit-control process and recover overdue accounts while protecting valuable commercial relationships. Payments are made directly to the Member, not to CPA.

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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