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

UK businesses are receiving conflicting signals as the new week begins. Confidence and hiring have improved, and Greater Manchester is forecast to outperform other mayoral regions, but tax uncertainty, elevated gilt yields, weak construction, softer house prices and rising global energy and food costs continue to put pressure on margins and cashflow. For businesses selling on credit, the combination reinforces the importance of monitoring customer finances closely: stronger sentiment does not necessarily mean stronger liquidity.

James Salmon, Operations Director

Key Developments

• Business groups and economists are intensifying warnings against further tax increases ahead of the Budget, with the BCC calling additional tax rises a potential “road to ruin”.
• UK construction remains firmly in contraction, while house prices have recorded their first annual fall since November 2023.
• Business confidence and permanent hiring improved in August, providing some evidence that sentiment is recovering despite cost pressures.
• UK and European bond markets remain under pressure as inflation, defence spending and rising energy costs increase concerns around borrowing.
• Brent crude is close to $97 a barrel following further US-Iran escalation around the Strait of Hormuz, raising renewed cost and inflation risks.

Economy & Policy

UK businesses face another uncertain run-up to the Budget

Warnings over possible tax increases are becoming increasingly prominent ahead of Chancellor John Healey’s Budget. Former Prime Minister Rishi Sunak says higher gilt yields and inflation have eroded the Government’s £23.6bn fiscal headroom and argues that continued speculation over tax increases risks weakening business confidence and investment. US economist Arthur Laffer has separately argued that Britain needs stronger growth rather than additional taxation.

Why it matters: Businesses making hiring, investment and credit decisions need greater certainty over future costs, particularly when margins and borrowing conditions are already under pressure.

BCC warns further tax rises could damage growth

The British Chambers of Commerce has urged the Chancellor not to increase the burden on employers. Director General Shevaun Haviland said “piling more taxes on firms would be a road to ruin” and called for measures to reduce business costs instead. Proposals include lower employer National Insurance for workers under 25 and reductions in business rates.

Why it matters: Higher fixed employment and property costs leave SMEs with less working capital and can increase the likelihood that suppliers are paid more slowly.

Business confidence climbs to a near two-year high

BDO’s business optimism index rose to 94.22 in August, its highest level in nearly two years, helped by an improvement in the services sector. BDO’s output index reached 98.37, with travel and leisure proving resilient despite inflation concerns. However, the BCC says the average company’s overheads have increased by around 70% over the past decade.

Economists expect GDP to fall in July

Economists expect official figures to show the UK economy contracted by 0.1% in July, following growth of 0.3% in June. Investec expects a weaker start to the third quarter, while Pantheon Macroeconomics forecasts quarterly growth of just 0.2%. RSM UK noted that weaker retail sales suggest consumers may simply have shifted spending towards hospitality during the World Cup rather than increasing overall expenditure.

Bank of England governor highlights bond market pressures

Andrew Bailey has warned that defence spending, ageing populations, climate-related costs and weak growth are placing increasing strain on government bond markets. UK 10-year gilt yields have reached 5.28%, their highest since 2007, with Britain seeing the largest increase among G7 countries. The Government is simultaneously considering raising defence spending to 3% of GDP.

Bank of England urged to consider higher rates

Telegraph columnist Matthew Lynn argues that the Bank should consider increasing interest rates to restore investor confidence and reinforce its inflation-fighting credibility. The argument comes as international central banks also face renewed inflation pressure. Higher rates, however, would further increase financing costs for households and businesses.

Bank turns to AI for better economic intelligence

The Bank of England is increasingly using artificial intelligence, web scraping and alternative sources to supplement traditional economic statistics. Chief economist Huw Pill said the pandemic demonstrated the importance of extracting quantitative signals from qualitative information. The development follows concerns about falling response rates and revisions affecting Office for National Statistics data.

Healey targets “growth in every postcode”

The Chancellor is expected to outline plans to reform Treasury investment rules so infrastructure spending can be directed more evenly across the UK. John Healey wants changes to project appraisal and discount rates to support investment outside London. The policy forms part of the Government’s wider attempt to improve regional productivity.

Greater Manchester expected to lead regional growth

The ITEM Club forecasts Greater Manchester will grow by an average 1.7% a year between 2026 and 2030, compared with 1.1% for Liverpool City Region and 0.8% for the West Midlands. Prime Minister Andy Burnham has presented Manchester’s performance as evidence that stronger regional devolution can support growth. ITEM nevertheless cautions that the economic benefits of greater local powers are likely to emerge gradually.

Tax & Government

High street faces pressure from business rates and employment taxes

Retailers continue to challenge higher business rates and employer National Insurance costs. Hamish McRae argues that increased employment costs have contributed to more than 100,000 job losses in hospitality and retail, while Frasers Group founder Mike Ashley has criticised proposals affecting warehouses used by retailers. Businesses are concerned that higher fixed costs are reducing the viability of physical high-street operations.

Family manufacturers warn over IHT reforms

A Make UK and Bishop Fleming survey found 78% of family-owned manufacturers are worried about inheritance tax changes. Some 22% are considering selling to overseas buyers and 18% to domestic buyers, while 59% identified high energy costs as their biggest barrier to growth. Family Business UK says changes to business property relief are already influencing investment and succession decisions.

Reform personal allowance plan questioned

Tax specialists have questioned Reform UK’s proposal to increase the income tax personal allowance from £12,570 to £15,000. The change would save a basic-rate taxpayer around £486 annually but would carry a substantial cost to the Treasury. Critics argue that simplifying marginal tax rates and removing tax traps may provide a more effective route to improving incentives.

SME & Business Environment

Construction downturn continues

The S&P Global UK construction PMI fell to 44.3 in August from 44.7 in July, marking the sector’s 20th consecutive month below the 50 level separating growth from contraction. Housebuilding remains particularly weak. RSM UK expects little immediate relief as weaker real income growth and higher mortgage rates restrain demand.

Why it matters: Extended contraction increases credit risk throughout construction supply chains, where subcontractors and suppliers can be particularly exposed to delayed payments and insolvency.

UK house prices record first annual fall since 2023

Lloyds reported that house prices fell 0.4% year on year in August, the first annual decline since November 2023. Prices also declined 0.2% month on month following July’s 0.1% fall. Lloyds expects activity to remain subdued while borrowing costs and economic uncertainty weigh on buyers.

£1.2trn remains in low-interest savings

Analysis by Lightyear suggests approximately £1.2trn remains in bank and building society accounts paying minimal interest, representing around 62% of deposits. Average easy-access savings rates are estimated at 1.2%, well below inflation of 2.9%. The figures underline the continued preference of many households for liquidity despite weak real returns.

Employment & Labour

Hiring improves in August

KPMG and the Recruitment & Employment Confederation reported that the permanent placements index increased to 50.5 from 50.0 in August. The move takes permanent hiring marginally back into expansion territory. It provides another sign that employer confidence may be stabilising after a difficult period for recruitment.

Gen Z graduates favour office working

PwC says younger graduates are often more enthusiastic about working in offices than older employees, valuing networking, training and contact with experienced colleagues and clients. PwC expects employees to attend offices at least three days per week while allowing greater flexibility for parents and carers. Research with the Social Market Foundation also found that people beginning their careers in jobs offering strong development opportunities earned substantially more by age 35.

JLR opens voluntary redundancy programme

Jaguar Land Rover is opening a voluntary redundancy programme as reports suggest as many as 4,000 jobs could eventually be affected. Business Secretary Jonathan Reynolds is meeting JLR and Unite to discuss mitigating job losses but has ruled out a bailout. The manufacturer has faced tariffs, weaker sales and the continuing financial consequences of the 2025 cyberattack, which disrupted production and was estimated to cost £1.9bn.

Energy & Costs

Global food prices reach their highest since 2022

The UN Food and Agriculture Organisation says average global food prices have reached their highest point since 2022. Cereal prices increased 2.2% in August, while sugar prices rose almost 12%, reflecting adverse weather and supply disruption linked to the Russia-Ukraine conflict. Food-sector businesses therefore face renewed pressure on input costs.

Industry & Investment

Bailey warns of financial risks around AI valuations

Andrew Bailey has warned that a sharp fall in highly valued AI-related companies could trigger wider global market selling. Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla together represent around 33.8% of the S&P 500, making market concentration an important financial stability issue. Analysts nevertheless note that today’s largest technology companies are highly profitable businesses with substantial revenues and stronger balance sheets than many dotcom-era companies.

International & Trade

Strong US jobs data raises rate expectations

The US economy added 162,000 jobs in August, almost three times the 55,000 expected by economists. The unexpectedly strong labour market increased expectations that the Federal Reserve could raise rates later this month. President Donald Trump has again publicly pressed the Fed to reduce rates and threatened trade restrictions against countries running surpluses with the US.

Global Market Summary

Markets opened the week caught between renewed geopolitical and inflation concerns and another surge in AI-related optimism. US markets are closed on Monday for Labor Day, so European and Asian markets are providing the main price signals.

Equity markets

Asian technology stocks were the standout performers after renewed enthusiasm around AI infrastructure, while Germany underperformed following a 1.1% monthly fall in industrial production. European markets were otherwise subdued as investors balanced geopolitical risk, energy inflation and expectations of further central-bank tightening.

Market drivers

The principal risk remains the Strait of Hormuz. Further exchanges between the US and Iran pushed Brent crude close to $97 a barrel, while European natural gas also jumped as markets reopened. OPEC+ kept October production quotas unchanged, providing no immediate additional supply cushion.

The second major influence is interest-rate policy. Strong US payroll figures increased expectations of another Federal Reserve increase, while Bank of England and European Central Bank policymakers are also confronting renewed inflation pressure. Higher bond yields matter directly to businesses because they can feed into the price of mortgages, corporate borrowing and refinancing.

AI provided the main counterweight. Semiconductor shares rallied sharply in Asia, lifting South Korea’s Kospi by 4.6% and helping the Nikkei rise more than 2%.

Currencies

GBP/USD: 1.3536, +0.13% versus Friday.

GBP/EUR: 1.1648, +0.08%.

Sterling therefore strengthened modestly against both currencies. The most pronounced international move was in the Japanese yen, which strengthened sharply as markets increased expectations of tighter Bank of Japan policy.

Commodities

Brent crude: $96.76 per barrel, +0.50%

WTI crude: $91.60 per barrel, +0.13%

Gold: $4,405.30 per ounce, -0.56%

For UK SMEs, oil is the most immediately relevant move. Sustained crude prices around current levels could feed back into fuel, haulage, manufacturing, packaging and broader inflation, leaving businesses with another cost increase to either absorb or pass on.

Insolvency Watch

Administrations (8)

• FANELA LIMITED
• MANSELL BUILDING SOLUTIONS LTD
• NELA LONDON LIMITED
• PAGE AUTOMOTIVE GROUP LIMITED
• PUBLIC ENEMY CUSTOMS LIMITED
• PURELIFI LIMITED
• ROCA METALS (UK) LIMITED
• SMART DATA FOUNDRY LIMITED

Liquidations (29)

• 3I INTERNATIONAL SERVICES PLC
• AMC BEDFORD LIMITED
• ANDERSON ELEVATOR SERVICES LTD
• ANYTIME VENTURES GROUP LTD
• CAMSBI LTD
• COWDERY & MORRIS LIMITED
• DELIBERATE LEARNING LIMITED
• EXALATION LIMITED
• FOT TRADING AND SERVICES LTD
• INDUSTRIAL WATER SOLUTIONS LTD
• JOHN GRIFFITHS CONSULTING LIMITED
• JOSEPH YAEGER STUDIO LTD
• KC ORTHOPAEDICS LIMITED
• LONG LIFE EUROPE LIMITED
• NOON SEVEN LIMITED
• PAD PROPERTY INVESTMENTS LIMITED
• PATRICK COWLING ARABLE CONSULTANTS LTD
• PODIUM BIO LIMITED
• QUALITY COUNTS LIMITED
• RIVERSIDE COMPUTING CONSULTANCY LTD
• SAXEWAY LIMITED
• SEPSOLS LIMITED
• SHRAINA LIMITED
• SJP BEAULIEU CONSULTING LIMITED
• STAG ENERGY MANAGEMENT LIMITED
• STANLEY MARSH & COMPANY LIMITED
• THE MITRE PUB LIMITED
• TM MGMT LTD
• VM RECEIVABLES FINANCING II PLC

Winding-up Petitions (10)

• CENTRAL FUSION LIMITED
• CHARLIE KEENAN COUNTRY WEAR & OUTDOOR CLOTHING (TOOME) LTD
• ECOSMART FUELS LIMITED
• HDB PROJECTS LTD
• IPROJECT CHESHIRE LIMITED
• MCCABE EARTHWORKS (NI) LIMITED
• SCW SERVICES LTD
• SHOPFRONTS SCOTLAND LIMITED
• THE ROMAN-MILLAR COLLECTION LIMITED
• THE SANCTUARY NI GROUP LIMITED

Protecting cashflow when costs and uncertainty are rising

Improving confidence is welcome, but today’s news shows why businesses cannot rely on economic sentiment alone when deciding who to supply on credit.

Higher taxes, borrowing costs, energy prices and weak activity in sectors such as construction can put pressure on businesses that still appear healthy from the outside. When that happens, supplier invoices can become an unofficial source of working capital.

Strong credit management helps identify those changes earlier.

CPA can support businesses with CreditCare credit reports, customer and debtor monitoring, structured credit control support and our unique Overdue Account Recovery Service. Acting promptly can improve payment performance and reduce the risk of overdue invoices becoming bad debt, while CPA’s considerate approach is designed to preserve 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/

Just call 020 8846 0000 (Monday to Friday, 9am to 5pm) or email PaidQuick@cpa.co.uk today.

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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