Business News Round Up (08/07/2025)
UK small businesses face growing pressures as costs increase
Small businesses across the UK are facing growing financial pressures, following a series of cost increases and reduced government support during the first year of the new administration, Simply Business said. According to its latest SME Insights Report, the company said that a combination of higher employer National Insurance contributions, an increase to the national minimum wage and reduced business rates relief for retail, hospitality and leisure sectors has led to tighter margins for many firms. These developments come amid continued economic uncertainty, with global instability and changes in international trade policy adding further strain. The UK economy continues to experience weak growth, with high inflation, low levels of investment, and an unclear policy environment contributing to the slowdown. Business confidence has also declined. In 2023, just over a quarter of SMEs expected the economy to deteriorate over the coming year. By 2025, that figure had risen to 50%.
North West economy ends Q2 on more stable footing as price pressures ease
Business activity stabilised across the North West private sector in June, following a decline in output in recent months, the latest NatWest Growth Tracker survey showed. The result was seen alongside an easing of price pressures across the region. The headline North West Business Activity Index came in at 50.0 in June, registering in line with the threshold that separates growth from contraction. It marked an improvement from May’s 49.5 and ended a sequence of declining activity levels stretching back to October last year. The latest decrease in new business was only modest, with the rate of decline slowing to the weakest since the current downturn began in November last year. Firms in the North West reported a further slowdown in the rate of increase in costs in June. Latest data, likewise, showed back-to-back moderations in the rate of inflation in average prices charged by businesses for goods and services.
Deloitte: UK climbs to top spot for global investment attractiveness
Deloitte’s latest survey of UK chief financial officers shows that finance leaders see the UK as the most attractive destination when it comes to investment, alongside India, with a net 13% describing it as very or somewhat attractive. The survey – which took place between 16 and 29 June – is a contrast from the fourth quarter survey of 2024, when the UK came in sixth place, behind the US, India, the Middle East, emerging Europe and Japan. There was a slight increase in business sentiment overall among CFOs this quarter, with the index of business optimism seeing a modest increase for a second quarter to -11%, compared to -14% last quarter. CFOs now expect inflation to decline to 2.9% by the middle of next year and expect the Bank of England to lower its base rate to 3.75% over the next 12 months, down from its current rate of 4.25%.
Private sector expansion driven by services sector
Scotland’s private sector has recorded its strongest monthly rise in output in seven months, though growth remained solely driven by the services sector. The Royal Bank of Scotland Growth Tracker also reveals a rise in Scottish companies’ overall optimism about the prospects for increased business activity. There was a marginal drop in employment, as its labour market proved second-most resilient in the UK in June. Manufacturing companies in Scotland recorded a ninth successive monthly fall in incoming new orders during June, as services firms reported a further expansion. Scotland was placed sixth in the league table of the 12 UK nations and regions in terms of growth of its private sector economy in June. In May, it was in fifth place. The headline Royal Bank growth tracker for Scotland rose to 50.9 in June from 50.5 in May on a seasonally adjusted basis. A level above 50 represents expansion.
https://dailybusinessgroup.co.uk/2025/07/private-sector-expansion-driven-by-services-sector/