Business News Round Up (29/01/2026)
ICAEW: Scottish business confidence hits three-year low amid tax and tariff fears
Business confidence in Scotland has dropped to its lowest level since 2022, amid ongoing uncertainty and waning economic growth, according to ICAEW. Sentiment tracked by ICAEW’s Business Confidence Monitor (BCM) for Q4 2025 found that confidence in the country had decreased for the sixth consecutive quarter to – 12.7, down from -0.5 in the previous quarter. It is the weakest confidence reading since Q4 2022 and below the UK average. ICAEW said the findings reflected ongoing uncertainty surrounding both the UK and Scottish government Budgets, political developments ahead of the May elections, and a slowdown in Scottish economic activity. Scottish firms identified the tax burden as the biggest growing challenge, cited by a record high of 68% of respondents, likely a result of pre-Budget speculation and recent tax increases, such as the rise in National Insurance contributions.
Rise in financial distress for NW businesses continues in final quarter of 2025
The number of North West businesses experiencing ‘significant’ financial distress increased by 10.8% year-on-year to 74,268 in the final quarter of 2025 according to the latest figures from Begbies Traynor’s ‘Red Flag Alert’, which has monitored the financial health of UK companies for almost two decades. But Begbies partner Dean Watson says the bleak economic backdrop provides an opportunity for stronger players to take market share or even rescue what he calls ‘zombie’ companies. The hard data seems to be backed up by evidence on the ground as the headlines this week are dominated by the troubles at The Original Factory Shop, Revolution Bars and now retailer Game. Analysis of the data has also found the distress trend present across the North West sub-regions – Greater Manchester (+10.8%), Merseyside (+8.2%), Lancashire (+11.6%), Cheshire (+11.6%) and Cumbria (+3.7%) – all experiencing an annual increase of ‘significant’ distress in the same period.
Pressure builds on Scottish Government over hospitality rates relief
The Scottish hospitality sector is urging the Scottish Government to deliver on its commitment to pass on funding from Westminster after the UK Government announced a business rates discount for pubs and music venues in England. From April, qualifying venues south of the border will receive a 15% reduction on business rates, frozen for two years. Treasury Minister Dan Tomlinson confirmed the support package will be worth £1,650 for the average pub in 2026–27 and said it will cost £80 million in its first year. Valuations for subsequent years will be set by the Office for Budget Responsibility. The move follows criticism of the UK Government’s Autumn Statement, which had triggered warnings of steep rates increases for many hospitality businesses and resulted in over 1,000 English pubs announcing bans on Labour MPs.
Corporate insolvencies underline pressure on UK firms – NW start-up rate improves
UK businesses continued to face intense financial pressure throughout 2025, with 28,616 insolvency activities recorded, while start-ups declined, according to a new report from R3. the trade association for the UK’s insolvency, restructuring, advisory, and turnaround professionals. While corporate insolvency-related activities, including administration and voluntary and compulsory liquidations, eased slightly compared with 2024, when there were 29,366 instances, they remain significantly above pre-pandemic norms, reflecting a fragile operating environment for many businesses. Tom Russell, president of R3, said: “2025 was a year in which UK businesses struggled to regain their footing after several years of economic challenges. While inflation has eased, the cumulative impact of higher costs, tighter credit conditions and weak demand continues to place significant pressure on cashflow, particularly for smaller and mid-sized firms with limited financial headroom.”