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

UK businesses are entering the final quarter of the year with a difficult combination of continued economic growth, rising costs and a prolonged employment downturn. SMEs report increasing pressure to raise prices, mortgage rates have reached 6%, and employers continue to reduce headcount despite the wider economy expanding. For businesses selling on credit, this environment makes customer affordability, payment behaviour and early identification of deteriorating credit risk increasingly important.

James Salmon, Operations Director.

Key Developments

• Nearly 80% of SMEs report pressure to increase prices because of higher labour and raw-material costs.
• UK employers have now cut staffing for 24 consecutive months, the longest downturn since the early 2000s.
• The UK composite PMI eased to 52.0, showing continued private-sector growth but weaker momentum.
• Average new five-year fixed mortgage rates have reached 6%, adding further pressure to household finances.
• European markets rallied as oil prices eased, although French fiscal concerns and elevated borrowing costs remain significant risks.

SME & Business Environment

SMEs reach the limit on absorbing rising costs

Nearly 80% of SMEs face pressure to increase prices because of rising labour and raw-material costs, according to research from skills charity Enginuity. Almost three quarters now expect to pass higher costs on to customers, while two-thirds are not operating at full capacity for the second consecutive year. The findings suggest that many smaller businesses have less room to protect customers from cost increases through lower margins.

Why it matters: Higher prices can place additional pressure on customers already managing tight cashflow, increasing the importance of monitoring payment behaviour and reviewing credit exposure.

Google faces £1.2bn UK app-store class action

Alphabet is defending a London class-action lawsuit alleging that Google overcharged users of its app store and restricted competition. The claim covers around 20 million customers since 2015 and seeks approximately £1.2bn in compensation, equivalent to around £60 per customer. Alphabet denies wrongdoing.

Economy & Policy

UK private-sector growth loses some momentum

The UK composite PMI fell to 52.0 in September from 52.5 in August, although the final figure was stronger than the preliminary estimate of 51.7. A reading above 50 continues to indicate expansion, but the slowdown reflects softer growth in services.

At the same time, firms reported that both input costs and the prices charged to customers increased at their fastest pace since June. That combination of slower momentum and stronger price pressure creates a challenging backdrop for businesses trying to protect margins.

Why it matters: Slower growth combined with rising costs can weaken customers’ ability to pay invoices on time even when headline economic activity remains positive.

Mortgage rates climb to 6%

The average rate for a new five-year fixed mortgage has reached 6%, its highest level in three years. Two-year fixed rates average 5.98%, while Moneyfacts estimates that around 1,500 mortgage products priced below 5% have disappeared since early September.

Higher wholesale funding costs and global economic uncertainty have contributed to the increase.

Why it matters: Higher mortgage payments reduce disposable income and can weaken consumer demand, eventually feeding through to businesses serving households and consumer-facing supply chains.

Employment & Labour

Britain’s jobs downturn reaches 24 months

S&P Global’s PMI survey indicates that employers reduced staffing for a 24th consecutive month, making this the longest jobs downturn since the early 2000s. There are signs that the decline may be stabilising, with services-sector job losses running at their slowest rate in almost a year.

The wider picture nevertheless remains weak. The UK economy has grown around 2.5% since early 2024, yet firms have cut roughly 250,000 payroll jobs, including 95,000 this year. Unemployment stands at 4.9%, while youth unemployment has reached 16.4%.

IT, professional services, manufacturing and retail have together shed almost 120,000 jobs since December. Companies are increasingly investing in technology and automation, with capital spending 5.2% higher year-on-year in the second quarter.

Why it matters: Businesses may be becoming more productive, but weaker employment can eventually affect demand and customer payment capacity, while suppliers increasingly need to assess whether growth in turnover is translating into reliable cashflow.

Tax & Government

$160bn in wealth estimated to have left Britain

Bloomberg data suggests that ultra-wealthy individuals weakening or ending their UK ties over the past two years represented approximately $160bn in wealth. Advisers have highlighted changes to the tax treatment of non-domiciled individuals and inheritance tax as factors influencing decisions about where investors and entrepreneurs live and hold assets.

For businesses, the wider question is whether changes in investment behaviour affect UK capital formation, entrepreneurship and business confidence.

Overseas scrutiny of wealthy UK taxpayers reaches seven-year high

Foreign tax authorities made 1,772 requests to HMRC for information on wealthy UK taxpayers during 2025, up from 1,693 in 2024 and 1,393 in 2020. Requests increasingly cover overseas property, cryptocurrency transactions and income earned through international digital platforms.

The figures reflect expanding cross-border data sharing and stronger enforcement of offshore tax obligations.

Industry & Investment

Pension reform debate focuses on long-term investment

Lady Mayor Susan Langley has called for reform of the UK pension system to reduce barriers across the pension investment chain and encourage more effective deployment of capital.

The argument is that greater emphasis on long-term investment returns rather than simply minimising fees could both improve outcomes for savers and channel more investment into UK businesses and infrastructure.

International & Trade

France and Germany seek stronger EU trade defences

France and Germany have proposed new measures giving the European Union greater powers to respond quickly when countries retaliate against European action designed to tackle unfair competition.

Although China was not explicitly named in the proposals, they come shortly before EU-China trade talks in Beijing.

Euro pressured by French debt concerns

The euro recently fell to a 17-month low around $1.116 as investors focused on France’s deficit, debt burden and political uncertainty. French 10-year borrowing costs have approached 5%, although bonds recovered somewhat on Tuesday after alternative fiscal proposals were presented.

For UK businesses trading with Europe, currency volatility can quickly affect import prices, margins and the sterling value of euro-denominated invoices.

Global Market Summary

Markets opened Tuesday with a more positive tone as lower oil prices reduced some inflation concerns and strong technology shares supported global equities.

The FTSE 100 traded around 10,591.85, up 0.89%, while the STOXX Europe 600 rose 0.95% to 639.64. The Euro Stoxx 50 gained 0.92% to 6,299.56, Germany’s DAX advanced 0.92% to 25,486.23, and France’s CAC 40 rose 0.81% to 7,897.46.

In the US, Monday’s session was led by technology. The S&P 500 closed at 7,773.95, up 0.66%, the Dow Jones at 51,267.90, up 0.18%, and the Nasdaq 100 at 31,076.44, up 0.87%. Technology optimism helped offset concerns over US Treasury yields, which briefly reached their highest levels since 2002.

Asian markets were also mostly stronger. The Nikkei 225 rose 1.05% to 70,683.98, while the Hang Seng gained 1.00% to 24,280.56.

Market drivers

AI investment remains a major source of equity-market strength. Foxconn reported quarterly revenue up 47% year-on-year, while semiconductor companies continue to report exceptionally strong demand. European markets are simultaneously being influenced by French fiscal concerns, elevated government borrowing costs and political uncertainty.

Oil prices have eased as Middle East supply flows recover and emergency reserves enter the market, offering some relief from recent inflation fears. However, European natural-gas storage remains below seasonal norms, leaving businesses exposed to renewed energy volatility during the winter.

Currencies

GBP/USD: approximately $1.3240, up 0.14%.

GBP/EUR: approximately €1.1779, down around 0.03%.

Sterling has remained comparatively firm as the euro struggles with French fiscal and political uncertainty.

Commodities

Brent crude: $99.05 a barrel, down $1.27.

WTI crude: $87.94 a barrel, down $1.49.

Gold: $4,152.76 an ounce, up $13.25.

Falling oil prices offer some short-term relief to transport-intensive businesses, although crude remains expensive and European gas-market risks continue. Gold remains supported by demand for defensive assets amid political and financial uncertainty.

Why markets matter to businesses selling on credit: Lower oil prices may ease some immediate cost pressure, but elevated interest rates, currency volatility and European fiscal concerns continue to make customer financial strength and payment behaviour important indicators of risk.

Insolvency Watch

Administrations (3)

• A & A COVERS (KENT) LTD
• EXHALATION TECHNOLOGY LTD
• SELCOM BUILDING SERVICES LTD

Liquidations (25)

• AIOLOS BIO LIMITED
• AZINI 3 (GENERAL PARTNER) LIMITED
• CAROL WILLEY MARKET RESEARCH LIMITED
• CHANGE WORKS FH LIMITED
• COLLINGDON INVESTMENTS (LUTON) LIMITED
• CROYDON MANAGEMENT SERVICES LIMITED
• FLYT LIMITED
• FORAY HOMES LIMITED
• INTU MH HOLDINGS LIMITED
• INVERMAY INVESTMENTS LTD
• IVY CARE HOMES 8 LIMITED
• J B M CONTRACTS (LESMAHAGOW) LIMITED
• MAC IP LIMITED
• MIKE DAWSON ANTIMICROBIAL RESEARCH CONSULTANCY LIMITED
• NORTH SEA (GOLDEN EAGLE) RESOURCES LTD.
• NSIP (GKA) LIMITED
• ORBS ENERGY LTD
• SD ACTUARIAL LTD
• STONEWEG CEE DEVELOPMENT HOLDINGS LIMITED
• STONEWEG SERT HOLDINGS LIMITED
• SVE HOLDINGS LTD
• TERASIA LIMITED
• TRIDENT ACTUARIAL LIMITED
• WEATHERPROOFING COMPANY LIMITED
• WPA CONTRACTING SERVICES LTD

Winding-up Petitions (2)

• CRAWFORD PRINT AND DESIGN LTD
• LANFINE HOLDINGS LIMITED

When rising costs make late payment harder to absorb

Today’s figures show why credit control becomes more important when margins are being squeezed. Labour costs, raw materials, borrowing costs and energy uncertainty are all competing for the same cash inside businesses. A customer that previously paid a little late can become a significantly greater risk when its own costs rise and demand weakens.

CPA can help businesses use CreditCare credit reports and debtor monitoring to identify changing customer risk, strengthen credit-control processes and improve payment performance.

Where invoices become overdue, CPA can support recovery through the professional and considerate approach of its Overdue Account Recovery Service, designed to secure payment while preserving valuable customer relationships.

Early action matters. The longer an overdue invoice remains unresolved, the more working capital remains unavailable to the business that earned it.

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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