UK company insolvencies decreased by 8% in June, totalling 2,043, which is 16% lower than the same month in 2024, according to the Insolvency Service. The decline was particularly evident in creditors’ voluntary liquidations, the most common insolvency type. David Hudson, restructuring advisory partner at FRP, described the data as a “glimmer of relief,” noting that hospitality and retail sectors are benefiting from favourable weather. However, he cautioned that “June’s unexpected jump in inflation will only serve to continue eroding profit margins and consumer demand.” Kroll’s head of restructuring, Benjamin Wiles, highlighted the resilience shown by businesses but raised concerns about whether this is sustainable, stating: “The second half of the year will be critical in determining whether this resilience can be sustained.”

The number of London-listed companies issuing profit warnings has significantly increased this year, with 59 alerts recorded in the second quarter, a 20% rise from 49 the previous year. Rachel Reeves’ tax policies, including National Insurance and minimum wage increases, have been cited as major factors affecting earnings. The EY-Parthenon report highlights that “rapid and unpredictable policy shifts” have a “paralysing effect” on business confidence and spending. Nearly 20% of firms have warned about profits over the past year, with the retail sector particularly hard hit. Silvia Rindone from EY noted that “falling sales are indicative of a longer-term shift,” as consumers become more value-focused.

Recent research by NatWest indicates that middle-market businesses in the UK are experiencing their fastest growth since Labour’s election last July. The study highlights that these firms, employing between 100 and 2,500 staff, have benefitted from increased sales and new product launches, despite facing challenges such as rising costs. However, business confidence remains below long-term averages, with concerns over higher taxes and low growth forecasts persisting.

Bob Lyddon, a banking expert and founder of Lyddon Consulting Services, has accused Chancellor Rachel Reeves of “reinstituting the exact same practices as seeded the ‘Boom’ and the ‘Bust’ last time around.” He warns that her policies, which include relaxing regulations on capital requirements and mortgage lending, could lead the UK into another economic crisis similar to the 2008 financial crash. Lyddon criticises Reeves’ claims of having “fixed the public finances and stabilised the economy,” pointing to reports from the Office for Budget Responsibility and the Office for National Statistics that indicate sluggish growth and high taxes. He cautions that her approach risks a return to “casino banking,” which previously left taxpayers liable for billions. Lyddon concludes, “The same result beckons: taxpayers on the hook again when Boom turns to Bust.”

In response to frozen tax thresholds and impending changes, many savers are altering their financial behaviours to mitigate tax burdens. The number of higher-rate taxpayers has surged to 7.1m, with 1.2m now in the additional-rate band. “Fiscal drag has had a devastating impact on the tax we pay. These figures show just how much damage is being done to our finances by this horrible stealth tax – and there is plenty more to come,” said Sarah Coles from the investment platform Hargreaves Lansdown. Families are reducing their work hours to reduce exposure to higher taxes and the loss of child benefit. People are also using salary sacrifice and pension contributions to reduce their earnings while spending less and ploughing savings into Isas.

Antonio Simoes, chief executive of Legal & General, has proposed lowering the automatic enrolment age for pensions from 22 to 18. He argues that this change would encourage young workers to develop savings habits early and ultimately strengthen the economy. Simoes said: “The best financial gift we can give young people is time,” pointing to the long-term benefits of starting pension savings early. His call comes ahead of the Government’s review of retirement provisions, led by Pensions Minister Torsten Bell, which aims to address inequalities in retirement savings. The review may also consider increasing auto-enrolment contributions, currently at 8%, amidst concerns from the Federation of Small Businesses about the impact on employers. Simoes believes that extending auto-enrolment would lead to a “win-win” situation, reducing reliance on state benefits and boosting investment in the UK economy.

The Home Office is reportedly collaborating with police to sell off seized cryptocurrencies, including Bitcoin, to help address a £5bn gap in public finances. According to a report in the Telegraph, plans for a “crypto storage and realisation framework” would allow law enforcement to securely store frozen digital currencies and sell them. However, the move is being criticised by Reform UK, which says the UK should be building up a Bitcoin reserve rather than selling crypto-assets off. Nigel Green, the CEO of global financial advisors the deVere Group, also said the move would be foolish given the increased global interest in building Bitcoin and other crypto reserves as regulatory clarity improves. He added that net receipts from selling the Bitcoin would be as little as 20–30% of gross proceeds and a sale now would mirror Gordon Brown’s disastrous gold sales in the late 1990s.

According to a new report by The Entrepreneurs Network (Ten), publicly funded accelerator programmes for young firms are inconsistent in quality and offer little value for taxpayers. The report highlights that over 500 accelerator schemes exist in the UK, with £219m invested since 2016 through Innovate UK. It states: “Despite substantial public investment in this space, a coherent strategy to guide funding decisions and measure outcomes is lacking.” Steve Rigby, co-chief of Rigby Group, advocates for a “different approach,” suggesting that public funds should focus on fewer, more effective programmes that genuinely add value. He noted the redundancy of local authority incubators competing with private sector initiatives, which hampers entrepreneurs’ growth.

Consultants are grappling with significant job cuts driven by AI advancements, according to a recent McKinsey report, which revealed a 43% decline in job vacancies in the UK since 2022. The professional services sector is experiencing a shift, with entry-level roles being replaced by AI technologies. Ian Pay from the Institute of Chartered Accountants in England and Wales noted: “Firms are now starting to talk about a ‘diamond model’ with a wide middle tier of management.” The Big Four accounting firms – Deloitte, EY, PwC, and KPMG – have reported a 44% reduction in graduate job postings compared to 2023. Additionally, offshoring practices are increasing, with firms outsourcing administrative tasks to countries with lower labour costs. James O’Dowd, founder of talent adviser Patrick Morgan, says AI and private equity competition is highlighting the inefficiencies of incumbent operating models and that more competition can be expected from smaller firms.

The FTSE 100 is outperforming its European counterparts for the first time in years. With a nearly 10% gain this year, it has reached record highs, surpassing the STOXX 600’s 7.5% increase. Justin Onuekwusi, chief investment officer at St. James’s Place, noted: “We are seeing signs of big asset allocators coming back to the UK,” highlighting a shift in investor sentiment. The index’s strong performance is attributed to a favourable UK/US trade deal, lighter regulations, and appealing valuations. However, challenges remain, including a sluggish economy and high inflation. Despite these issues, the FTSE’s 12-month forward price-to-earnings ratio has reached its highest in five years, indicating a potential recovery in the UK market.

Record numbers of investors sold gold bullion coins back to the Royal Mint between April and June this year, realising tax-free gains as gold prices reached unprecedented highs. The value of gold coins sold surged by 75% quarter-on-quarter and 55% year-on-year, with the Royal Mint noting “unprecedented engagement from UK investors.” One investor made a £70,000 profit by selling coins bought at £1,972.40 for £2,447.74. Despite the sell-back activity, purchases still outnumbered sales by a 6:1 ratio. Online sales of gold bullion coins also saw a 117% increase in revenue compared to the previous year. Additionally, sales of silver and platinum rose significantly, with silver sales up 51% and platinum sales soaring by 188%. Stuart O’Reilly, market insights manager at The Royal Mint, highlighted a shift in investor behaviour towards diversifying into other precious metals.

The global cryptocurrency market has surpassed $4tn for the first time, driven by significant US legislation that is expected to attract institutional investment. Bitcoin reached a record high of over $123,000, with other cryptocurrencies like ether and Solana also experiencing substantial gains. Mark Palmer, an analyst at The Benchmark Company, commented: “Institutional funds, which have been on the sidelines waiting for exactly this type of clarity, will flow into the space.” The recently passed Genius Act regulates stablecoins and is anticipated to encourage Wall Street banks and money managers to invest in digital assets.