A record number of companies are in “critical financial distress,” with the latest Red Flag Alert from Begbies Traynor showing that 49,309 firms on the brink. This marks a 21.4% increase on a year ago. A report from the corporate restructuring specialist said: “Consumer-facing industries continued to experience some of the most extreme rises in critical financial distress,” highlighting a 41.7% spike among bars and restaurants and a 17.8% increase in general retail. Ric Traynor, executive chairman of Begbies Traynor, said: “The sharp rise in critical distress underscores just how tough the economic environment is for UK businesses, and it’s abundantly clear that tens of thousands of firms are struggling to stay afloat.” All 22 sectors surveyed reported a rise in “critical” financial distress over the previous 12 months. Those experiencing “significant” financial distress rose by almost 11% year-on-year to 666,876 businesses. On a quarter-by-quarter basis, this marked a 15% increase on Q1.

Retail sales have fallen for the tenth consecutive month, according to Confederation of British Industry (CBI) figures. The CBI’s gauge of how retail sales compared with a year earlier came in at -34 for July. Although this marks and improvement on the -46 recorded in June, it continues a trend that has seen negative readings since October 2024. This came as retailers pushed up prices, having been hit by an increase in costs through hikes in National Insurance contributions, business rates and the minimum wage. The CBI has urged ministers to “seek to build shorter-term confidence” in the Government’s economic plans and deliver a Budget “that acknowledges the burden firms are facing.”

Office for National Statistics (ONS) data shows that the proportion of UK exports made up of goods has fallen to a record low of 40.8%. Analysis shows that goods accounted for around two-thirds of British exports in 2000, with it also found that the value of goods exports has been falling by 5.4% a year since 2023. Meanwhile, services exports have risen to a record of 59.2%, having jumped by 7.3% in the year to May. Overall, trade volumes increased by 1% between 2019 and 2024. This falls short of the 8% increase in trade seen across the G7 and the EU.

A group of the world’s leading economists have urged Keir Starmer and Rachel Reeves to use the Budget to prepare Britain for the introduction of a wealth tax that would help address inequality. In a letter signed by experts including José Antonio Ocampo, a former UN Under-Secretary-General for Economic and Social Affairs, the Prime Minister and Chancellor are warned that “we cannot allow extreme wealth inequality to deepen while millions of people are consigned to struggle for a basic quality of life,” and advised that the UK “can build a tax system fit for the 21st century.” The signatories go on to argue that a “progressive wealth tax is a critical step forward,” suggesting that a “modest” net wealth tax on assets of more than £10m could raise “enormous sums of money.” Campaign group Tax Justice UK, which co-ordinated the letter, estimates that a 1%-2% wealth tax on assets of more than £10m could raise up to £22bn a year while only affecting 0.04% of the population.

Data from Zoopla reveals that 83% of home buyers are now subject to stamp duty, a significant increase from 49% prior to a change in thresholds in April. The new stamp duty threshold for buyers is now £125,000, while first-time buyers face a reduced threshold of £300,000. This has led more buyers to negotiate a price reduction to compensate for the extra tax. Richard Donnell from Zoopla said: “Many more home buyers are paying stamp duty and want this extra cost reflected in what they pay.” Despite the rise in stamp duty, housing market activity has increased, with buyer demand for new homes up by 11% and sales agreed rising by 8% compared to last year. However, house price growth has slowed, with an average increase of just 1.3% in June. The average house price has reached £268,400, marking a £3,350 increase from last year. Zoopla forecasts a 1% rise in prices over 2025, down from an earlier prediction of 2%.

US President Donald Trump has advised Prime Minister Sir Keir Starmer to “cut taxes” and adopt a tougher stance on immigration if he wants to win the next election. President Trump, who criticised inheritance tax raids on farmers and emphasised the importance of low taxes and a strong economy, said he thinks Sir Keir will be a “tax cutter.”

European leaders have criticised the EU-US trade deal struck by President Donald Trump and European Commission chief Ursula von der Leyen. French Prime Minister Francois Bayrou suggested that it was a “dark day” for Europe, with the bloc having “resigned itself to submission,” while Hungarian PM Viktor Orban suggested that Mr Trump “ate von der Leyen for breakfast.” Ireland’s Minister of State, Neale Richmond, said the country is “not exactly celebrating” the deal, adding that it is “not a case that this is a good thing but it’s probably the least bad option.” German Chancellor Freidrich Merz said the agreement would “substantially damage” his nation’s finances, but noted that it “succeeded in averting a trade conflict.” Spanish Prime Minister Pedro Sanchez said he would support the deal “without any enthusiasm.” The deal places a 15% tariff on EU imports to the US. President Trump had threatened to impose a rate of 30%.

Ministers have called for an end to tariffs on steel exported from the UK to the US, with a 25% charge still in place despite a deal to cut it to 0% being agreed in May. Gareth Stace, director general at UK Steel, said: “There has been nearly three months of uncertainty for business, of whether we should export our steel or delay a little bit.” He has urged Prime Minister Keir Starmer and US President Donald Trump to “settle the zero-tariff deal once and for all,” adding: “UK steelmakers are losing contracts with their most critical clients in the US, and every passing day without a deal puts more jobs at risk.”

Official figures show that 639,000 graduates, equivalent to 12%, are claiming universal credit in the UK. The data, sourced from the Office for National Statistics’ labour force survey, indicates that while almost 9 in 10 of graduates were employed last year, the economic inactivity rate remains above 10%. Graduates had an unemployment rate of 3% and an economic inactivity rate of 10%, compared to 5.6% and almost 30% respectively for non-graduates. The report also highlights significant salary disparities, with medicine and dentistry graduates earning an average of £37,900, while those in media and communication earn around £25,000. Helen Whately, the Shadow Work and Pensions Secretary, commented: “Today’s graduates face the triple jeopardy of low-value degrees, a labour market crippled by Labour’s job taxes and competition with AI for entry-level roles.”