UK Business News Today: 7 August 2026 | Economy, Markets & Insolvencies

Tax uncertainty, weak housing growth and renewed pressure on energy prices are giving UK businesses plenty to consider at the end of the week. Proposals to overhaul National Insurance and future HMRC collection arrangements have put business and personal cashflow firmly in focus, while investors remain concerned about possible tax rises. At the same time, Bank of England analysis suggests AI is beginning to deliver measurable productivity gains, although some of those improvements are being accompanied by fewer job opportunities. Internationally, uncertainty around the Strait of Hormuz continues to support oil prices, adding another potential cost and inflation risk for businesses that are already managing tight margins and cautious customer demand.

James Salmon, Operations Director.

Key Developments

• HMRC’s proposed monthly tax collection system could create a difficult transition for millions of self-employed taxpayers, with warnings that some could effectively pay two years of tax within 14 months.
• Tax policy remains a major source of uncertainty, with proposals for a 52% top income tax rate and £1.6bn withdrawn from equity funds during July.
• Bank of England analysis suggests AI is starting to improve UK productivity, but vacancies are falling more sharply in occupations most exposed to automation.
• UK house prices were flat in July, with annual growth slowing to just 0.1% as affordability and mortgage costs continue to limit demand.
• Renewed tensions around the Strait of Hormuz have pushed Brent crude above $83, keeping energy costs and inflation risks firmly on the business agenda.

Tax & Government

HMRC monthly tax plan raises cashflow concerns

HMRC plans to introduce monthly tax payments for self-employed workers from April 2029, replacing the current system of two annual Self-Assessment payments with something closer to PAYE. Tax experts have warned that the transition could create overlapping liabilities for people already making payments on account, potentially leaving some paying the equivalent of two years’ tax within just 14 months. Around 3.6 million taxpayers could be affected, based on the proportion of Self-Assessment taxpayers currently making advance payments. The Association of Taxation Technicians has warned that the change could create significant cashflow pressure.

Why it matters: A sharp tax-payment transition could remove working capital from self-employed people and small businesses just when they need liquidity to meet suppliers and other creditors.

Think-tank proposes 52% top income tax rate

Think-tank Bright Blue has proposed a major overhaul of National Insurance that would abolish employer NI and bring employee and self-employed NI rates together at the lower rate currently paid by the self-employed. To replace the lost revenue, it proposes substantially higher income tax rates, including a new 13% band on earnings between £5,000 and £12,570, a basic rate of around 31%, a higher rate of around 48% and a top rate of 52%. The reforms would provide self-employed workers with workplace-style benefits including sickness support, parental leave and pension contributions. Bright Blue argues that the current system leaves a tax gap of around £10bn.

Investors remain concerned about tax policy

A Boring Money survey found that only 7% of investors believe Prime Minister Andy Burnham’s policies will improve their personal finances, while 50% expect a negative effect. Capital gains tax is the biggest concern, cited by 76% of respondents, followed by a possible wealth tax at 64%, land and stamp duty reform at 51% and inheritance tax at 50%. When asked which policies could benefit the wider economy, investors placed public spending and borrowing ahead of potential tax increases.

£1.6bn withdrawn from equity funds amid tax uncertainty

UK investors withdrew £1.6bn from stock market funds during July, according to Calastone, making it the worst month for equity fund withdrawals since late 2025. Withdrawals over the past year have reached a record £13.9bn. Calastone said investors have been unsettled by speculation around possible wealth taxes, capital gains tax changes, pension reforms and an exit tax, alongside previous changes affecting the inheritance-tax treatment of pensions.

UK national debt approaches £3trn milestone

Analysis from the TaxPayers’ Alliance suggests UK public sector net debt may now have passed £3trn, although official ONS figures for July have yet to confirm this. Debt stood at £2.99trn at the end of June, and the Office for Budget Responsibility had previously forecast that the £3trn threshold would be reached in September. The debt-to-GDP ratio is now around 95%, compared with below 30% in 2004.

Companies House increases enforcement against late filings

Companies House has intensified enforcement against directors who fail to meet statutory filing requirements. During the first half of this year, 23 directors were disqualified for a combined 70 years for serious non-compliance, while 360 directors faced prosecution for filing offences in the first quarter. Further reporting changes are planned from April 2028, when around two million small and micro companies will be required to provide profit and loss information for the first time.

London urged to seek greater fiscal powers

Professor Patrick Diamond of Queen Mary University of London has argued that Prime Minister Andy Burnham’s devolution programme should give London greater powers over taxation and investment. He proposes increased control over stamp duty, business rates, council tax and property-related capital gains tax, alongside retaining a share of income tax to fund housing, infrastructure and net-zero projects. London generates more than a fifth of UK GDP but has experienced weaker growth over the past 15 years.

SME & Business Environment

UK housing market flat as annual growth slows to 0.1%

The UK housing market was broadly unchanged in July, according to the Lloyds Banking Group house price index. Average prices remained at £299,253 while annual house-price growth slowed from 0.7% in June to just 0.1%, the weakest rate since November 2023. Lloyds said affordability pressures and higher mortgage rates continue to weigh on demand, although mortgage approvals and transaction activity suggest the market may be stabilising.

Employment & Labour

AI productivity gains are beginning to appear in UK data

Bank of England analysis suggests British companies developing and adopting artificial intelligence are beginning to record stronger productivity. Software and IT consulting firms increased their contribution to annual productivity growth tenfold compared with the decade before Covid, while administrative and business-service firms are seeing gains where repetitive processes such as scheduling and invoice processing can be automated. The findings provide some early evidence that AI adoption is moving beyond experimentation and beginning to affect economic performance.

However, productivity improvements may come with a labour-market cost. A separate Bank analysis found vacancies in occupations most exposed to AI fell 15% over the past three years, compared with 10% in medium-exposure roles and 6% in occupations with low exposure. Customer-service and administrative vacancies fell by more than 20%.

DeepMind shake-up raises questions over UK AI leadership

Demis Hassabis is stepping down as head of Google DeepMind to become DeepMind chair and Alphabet’s chief scientist. Google is consolidating more of its AI development work around its California headquarters following the departure of several important engineers, weakening London’s position as the centre of the company’s core AI effort. Hassabis will continue to run London-based Isomorphic Labs, which focuses on AI-assisted drug discovery.

Industry & Investment

EasyJet agrees £5.7bn Apollo takeover

EasyJet has agreed to be acquired by US investment firm Apollo in a deal valuing the airline at approximately £5.7bn after rival bidder Castlelake withdrew. Apollo’s agreed offer of £7.15 per share exceeded Castlelake’s final £6.90 proposal. EasyJet employs more than 19,000 people and operates around 1,200 routes across 35 European countries.

Apollo said it supports EasyJet’s current strategy and sees an opportunity to accelerate the airline’s operational and commercial ambitions. EasyJet chief executive Kenton Jarvis said Apollo’s aviation experience made it a strong partner for the company.

Energy & Costs

Extreme heat continues to disrupt Europe

More than 25,000 excess deaths across Europe have been linked to extreme heat this year, according to data compiled from government agencies and research organisations. Germany recorded the largest estimated toll, while repeated heatwaves across Western Europe have also affected economic output. Climate-related disruption is increasingly becoming an operational issue for employers, transport networks and supply chains.

For the UK, Friday is largely dry with temperatures varying considerably by region. The Met Office showed London reaching around 26°C on Friday, rising to 28°C on Saturday and around 32°C on Sunday, while many northern areas remain cooler.

International & Trade

Hormuz negotiations remain uncertain as Iran seeks shipping restrictions

Iran reportedly wants to prevent US and Israeli vessels from using the Strait of Hormuz and require compensation from countries it regards as hostile before allowing their ships through under a proposed arrangement involving Oman. The US continues to insist on unrestricted navigation and a return to the pre-war position, without approvals, tolls or charges.

Tehran has said a full reopening would require the US maritime blockade to be lifted. With neither side yet indicating agreement on those central issues, the outlook for one of the world’s most important energy shipping routes remains uncertain.

Global Market Summary

Global markets entered Friday cautiously as investors balanced strong corporate earnings against renewed tension in the Strait of Hormuz and the prospect of another shift in US interest-rate expectations. European equities are edging higher while US futures are mixed ahead of the July US employment report.

UK and European markets

The FTSE 100 closed Thursday down 0.19% at 10,867.89, having spent much of the session in positive territory before late selling erased its gains. Higher oil prices pushed gilt yields upwards and weighed on rate-sensitive shares. The FTSE 250 performed better, rising 0.3% to a record 24,695.42, helped by strong moves in WPP and EasyJet.

WPP surged 29% following better-than-expected results, while Diageo also strengthened after outlining a $1bn cost-saving programme.

European markets remained firmer. The STOXX Europe 600 closed 0.2% higher at a record 658.19, while the Euro STOXX 50 rose 0.40% to 6,502.56. Germany’s DAX gained 0.05% to 26,140.13 and France’s CAC 40 rose 0.35% to 8,699.71.

On Friday morning, the FTSE 100 was up 0.16% at 10,885.50, the STOXX Europe 600 was 0.25% higher at 659.87, the Euro STOXX 50 had gained 0.33% to 6,523.94, the DAX was up 0.54% at 26,280.51 and the CAC 40 was 0.23% higher at 8,719.98.

US markets

Wall Street finished lower on Thursday as rising energy prices and Treasury yields revived inflation concerns.

The S&P 500 fell 0.18% to 7,709.96.

The Dow Jones Industrial Average dropped 0.85% to 53,885.10, ending a five-session winning run.

The Nasdaq 100, declined 0.39% to 29,373.33.

Friday, S&P 500 futures are 0.13% higher at 7,742.25, while Nasdaq 100 futures are up 0.51% at 29,612.75.

Investors were awaiting the July US non-farm payroll report, where consensus was for an increase of 80,000 jobs after 57,000 previously. Market expectations around Federal Reserve policy have become more sensitive following indications that Fed Chair Kevin Warsh may be prepared to raise rates if inflation remains too high.

Asian markets

Asian markets produced a mixed session.

Japan’s Nikkei 225 slipped 0.12% to 65,606.71.

Hong Kong’s Hang Seng gained 0.54% to 25,668.03.

The Shanghai Composite rose 1.02% to 3,940.04, helped by enthusiasm around AI infrastructure.

South Korea’s KOSPI fell 0.60% to 6,258.77, while Australia’s ASX 200 slipped 0.09% to 9,263.63.

Market drivers

The Strait of Hormuz remains the dominant geopolitical factor. Reports of Iranian strikes close to Qeshm Island and continuing disagreement over the terms for reopening the waterway have kept a significant risk premium in energy prices.

Interest-rate expectations are the other major influence. US markets are increasingly sensitive to evidence that inflation or employment remains strong enough to justify another Federal Reserve rate increase.

Corporate earnings remain broadly supportive in Europe, but individual technology shares are showing large divergences. AI infrastructure-related companies have performed strongly in several markets, while some memory, advertising-technology and software businesses have suffered sharp falls after weaker guidance.

Investor positioning is also becoming stretched. The Bank of America’s bull-bear sentiment indicator had reached 9.7, its highest level since 2021.

Currencies

Sterling was slightly softer in early Friday trading.

GBP/USD: 1.3447, down around 0.06%.

GBP/EUR: 1.1669, down around 0.05%.

The dollar strengthened modestly on Thursday as higher oil prices and increased expectations of tighter US monetary policy supported yields.

For UK businesses importing goods or materials priced in dollars, a weaker pound can add to costs, particularly when it coincides with rising energy and freight prices.

Commodities

Energy remained the principal source of market risk.

Brent crude: $83.22 per barrel, up 0.89%.

WTI crude: $77.89 per barrel, up 0.78%.

Brent had risen sharply on Thursday as hopes of an immediate Hormuz agreement faded. The possibility of continued disruption to Persian Gulf shipping is also affecting freight, insurance and alternative sourcing arrangements.

Gold: $4,308.31 per ounce, up 1.63%.

Gold was heading for its strongest week since January as investors continued to seek protection against geopolitical and inflation risk.

Silver is up 4.5% at $64.31 per ounce and copper at 671.70 cents per pound, close to record territory.

For UK businesses, the most important message from markets is that energy and financing risks remain closely connected. If oil stays elevated, inflation could prove harder to contain, making rapid reductions in borrowing costs less likely.

Insolvency Watch

Administrations (6)

• INSTITUTE OF OCCUPATIONAL MEDICINE
• KH RESTAURANTS LIMITED
• OCTANE HOUSING & DEVELOPMENT (3) LTD
• OCTANE HOUSING AND DEVELOPMENT (2) LTD
• PAYMÁN HOLDINGS 6 LTD
• TRAMMELL CROW COMPANY LOGISTICS (SHEPCOTE) LIMITED

Liquidations (11)

• BENTLEYS CASTLE FRUIT FARM LTD
• CHALCROFT SOLAR POWER LIMITED
• CODICES INTERACTIVE LTD.
• DISCOVERY FORENSICS LTD
• GMT COMMUNICATIONS PARTNERS LTD
• MAM INVESTMENT GROUP LTD
• MARKLIN DEVELOPMENTS LTD
• MERCURY MEDICAL REPORTING LIMITED
• PROTEMPUS LIMITED
• SPACE INSIGHT LIMITED
• THE LUSH CONSULTANCY LTD

Winding-up Petitions (74)

• 1ST RESPONSE BUILDING MAINTENANCE LTD
• 8 VICTORIA EMBANKMENT LIMITED
• A & B CONTRACTORS (DEVON) LIMITED
• ACS GROUP SERVICE LTD
• ANTHONY JONES (U.K.) LIMITED
• AREA SCREEN PRINTERS LIMITED
• ARMAR HOLDINGS LTD
• ASTRA MIDLANDS LIMITED
• ATLAS ICS LIMITED
• BLACK FOX LEISURE LTD
• BP TRADING LIMITED
• C & D SERVICES (UK) LIMITED
• C.M. CONSULTANCY LIMITED
• CASPIAN TRADING LTD
• CENTURION WASTE LIMITED
• CHOICE CONTRACTING UK LIMITED
• CRESCENT EDUCATION SERVICES LTD
• DARE TO DIFFER (KENT)
• DRAMMEH MOTORTRADE LTD
• EMPYREAN CARE GROUP LTD
• EVE CONNECT LTD
• FISH & GRILL LTD
• FK HAIR DESIGN LTD
• FRC SERVICES LTD
• G-COMMERCE UK SERVICES LIMITED
• GEOCARE SERVICES LIMITED
• HARROGATE WHOLESALE MEAT COMPANY LIMITED
• HOLISTIC COMMUNITY CARE LIMITED
• J QUICK CONSTRUCTION LTD
• JDS BRANDS LTD
• JRLANDSONS LTD
• JRT CONSULTANCY LIMITED
• JWD DEVELOPMENTS NW LIMITED
• LUFTAVIA LTD
• MARKET KUBUS LTD
• MAT’S GROUP LIMITED
• MATTHEW2707 LTD
• MJ REFRIGERATION TRANSPORT (NORTH) LTD
• MODE TRAINING LTD
• MODULAR MOVEMENT SPECIALIST LTD
• MUSSA COURIERS LTD
• NAVIGO LEGAL SERVICES LIMITED
• NETCRUX LTD
• NO1 PHD LIMITED
• OC CONSTRUCTION YORKSHIRE LTD
• ODA EVENTS LTD
• OLDCO1 LTD
• PALM PANASIA DEANE GATE LIMITED
• PAYE PRO SOLUTIONS LIMITED
• PENGARREG CLEANING COMPANY LIMITED
• PEOPLE OUTSOURCING SOLUTIONS LTD
• PINT OF LANARK LTD
• PRESTIGE EXPORTS (LONDON) LIMITED
• RED CONTRACTORS CONSTRUCTION LTD
• REEL SOUL LTD
• RIVERSIDE LEGAL SERVICES LIMITED
• S BROOKES LIMITED
• SCELLA VENTURES (2) LIMITED
• SERVICES MM UK LTD
• SHONCEE CONSTRUCTION LIMITED
• SIB COMMUNITY SUPPORT LTD
• SOLARION LTD
• STAN BUILDERS LTD
• STOURBRIDGE LIMITED
• STRADEY MOTOR COMPANY LTD
• THE CRAFTY BEER SHOP – LETCHWORTH LIMITED
• THE FAMILY SHOPPER MIDLANDS LIMITED
• THE FESTIVE DECORATORS (UK) LIMITED
• TLEH CONSULTING LIMITED
• UK DRAINS LIMITED
• UNITED LED LTD
• VEXIRA LIMITED
• WENLOCK PIE LTD
• WINTAX CARS LTD

Keeping cash moving while uncertainty builds

Today’s stories share one consistent theme: cash needs to be protected before pressure becomes a problem.

Tax uncertainty can encourage customers to hold onto money for longer. Higher energy costs can squeeze margins. A weak housing market can slow activity across entire supply chains. And the insolvency notices above are a reminder that financial difficulty does not always announce itself well in advance.

For businesses supplying goods or services on credit, that makes good information and early action increasingly important.

CPA Members can use CreditCare credit reports to support decisions before extending credit and debtor monitoring to identify changes in customer circumstances. Where invoices become overdue, CPA can help with professional overdue account recovery, encouraging customers to pay the Member directly while protecting important commercial relationships.

CPA can also support businesses that want to strengthen their wider credit-control process, reduce the internal time spent chasing overdue accounts and improve payment performance.

The earlier an overdue account is addressed, the more options a business generally retains.

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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