Business creation slides as closures hit 160k

UK business creation has reached its lowest level in a decade, with only 157,980 new launches reported. This decline follows the closure of 160,415 businesses in just six months, with these closures attributed in part to increased taxes and regulations. Shadow Business Secretary Andrew Griffith has warned that some entrepreneurs are leaving the UK, while others hesitate to start new ventures. Liberal Democrat Treasury spokesperson Daisy Cooper said: “Too many budding entrepreneurs will look at the Government’s crushing jobs tax and anti-growth agenda and be put off even trying to get their business off the ground.”

Manufacturers remain upbeat

UK manufacturers increased production for the fourth consecutive month in July, reaching the fastest pace in nearly two years, according to the S&P Global poll. The purchasing managers’ index (PMI) dipped to 51.9 in July, down from 52.5 in June, with a reading above 50 indicating ongoing expansion. This comes despite concerns over the conflict in the Middle East affecting oil and gas supplies and increasing the cost of production. Rob Dobson, director at S&P Global Market Intelligence, said July brought “further encouragement” for the manufacturing sector, as rates of growth in output, new orders and new export business all accelerated. However, employment growth slowed, with uncertainty impacting the labour market.

CGT hike could cost the Treasury £7.8bn

Former Labour leader Lord Kinnock has urged Prime Minister Andy Burnham to raise capital gains tax (CGT) in his first Budget by aligning CGT rates with income tax rates. He says such a move would be a fair reform and could raise an estimated £12bn for the Treasury. Critics have warned that higher CGT could discourage investment and encourage people to delay selling assets. While aligning CGT with income tax has the support of senior Cabinet members including Louise Haigh, the First Secretary of State, and Wes Streeting, the Defence Secretary, analysis from investment platform IG suggests that the changes would probably cost the Treasury £7.8bn a year. Joshua Raymond, of investment platform XTB, said: “Capital gains tax has historically been lower than income tax because investing involves the possibility of losing money. The lower CGT rate provides an incentive against that risk.”

HMRC plans could see higher fines for errors

Tax experts have criticised HMRC proposals that could impose much higher penalties on taxpayers who fail to correct mistakes after being notified. Under the plans, an error that is currently treated as careless could be reclassified as deliberate if not fixed within a set timeframe, increasing maximum fines from 30% to 100% of the tax owed. The changes, experts say, could particularly affect freelancers, self-employed workers and landlords. HMRC could also gain powers to investigate up to 20 years of financial records for such cases, compared with the current six-year limit for non-deliberate errors. Accountants argue that the proposals risk punishing taxpayers acting in good faith, with Nimesh Shah from Blick Rothenberg warning that people may unknowingly make mistakes due to the complexity of the tax system.

PM urged to rethink tax freeze

Campaigners have criticised Prime Minister Andy Burnham for failing to commit to raising the tax-free Personal Allowance, currently frozen at £12,570 until 2031. Those calling for the rate to be increased say the freeze, which has pushed more taxpayers into higher tax brackets, is unfair and hurts working people. Experts estimate that even a modest increase could cost the Government £5m, while a rise to £18,000 would cost £40bn.

Tourist tax could cost 33k jobs

UKHospitality has warned the Government that the proposed overnight visitor levy could lead to a loss of 33,000 jobs in the tourism sector and burden holidaymakers with over £1bn in additional costs. The All-Party Parliamentary Group for Hospitality and Tourism has called on the Government to commit to a full review of the policy.

Hiring falls in H1

UK hiring declined in the first half of 2026, with job postings down 11% since the start of the year and 32% below pre-pandemic levels, according to Indeed. Graduate vacancies fell to their lowest level for this point in the year since 2020, while summer job postings hit a four-year low, highlighting ongoing challenges for younger workers. Advertised wage growth also slowed to 3.9%, the weakest since early 2022. Meanwhile, the data shows that demand for AI skills reached a record high, with AI-related tools mentioned in 9.4% of UK job adverts.

Tories warn over job reforms

The Conservatives have voiced concern over the Employment Rights Act, arguing that it will increase strike action, raise costs for employers and damage job creation. They warn reforms including online strike ballots, longer employment tribunal claim deadlines and expanded union rights could burden businesses and discourage hiring. Conservative leader Kemi Badenoch said the Employment Rights Act “has been a total disaster for business and for jobs,” adding that Britain “has a graduate recruitment crisis and rising unemployment in part because of this terrible legislation.”

Chancellor urged to protect pension withdrawals

Finance experts are urging Chancellor John Healey to confirm that there will be no changes to the pension tax-free lump sum ahead of the Budget in October, warning that uncertainty can damage savers’ retirement plans. The experts argue that former Chancellor Rachel Reeves’ refusal to dismiss speculation about taxing the lump sum prompted a surge in withdrawals, with pension savers taking out £18.3bn in 2024/25 compared with an annual average of £7.9bn between 2018 and 2023. PensionBee and AJ Bell say an early commitment to leave pension tax relief unchanged would reassure savers, help prevent unnecessary withdrawals, and support long-term investment.

Clients wary of AI-generated reports

A survey of nearly 3,900 companies by Source Global Research found widespread scepticism about AI in consulting, with 70% of clients saying they would not trust a report prepared using AI and 32% saying its use would undermine their confidence in a consultancy. Clients with direct experience of AI tools were even more negative, with 77% viewing AI as a bubble compared with 55% of those without such exposure. More than three quarters of UK consulting firms are using AI to carry out work, according to a survey by the Management Consultancies Association, while the Big Four of Deloitte, EY, KPMG and PwC have significantly cut back their graduate recruitment schemes as they invest billions in AI technology. However, concerns remain after several high-profile errors were linked to the use of AI.

Founders unsure over PM’s business stance

A survey of more than 400 UK scale-up founders by Helm has found widespread pessimism about the business outlook under Prime Minister Andy Burnham. Only 6% viewed him as pro-business, while 83% expected conditions to remain unchanged or worsen.