Despite the political disruption so evident recently in the UK, with mass demonstrations and protests and the domination of the narrative by immigration issues, what matters most for the business community is the interminable wait for the next Budget, still not due until the end of November.

In the meanwhile, the economy stalls, while fear of tax rises and other measures continue to paralyse business investment. This is the absolute antithesis of the conditions needed for economic growth.

The influential indicator, the S&P Global preliminary UK composite purchasing managers’ index (PMI):

• Reported a reading of 51.0 for September, which was its lowest score for four months. It dropped from a reading of 53.5 in August.
• Firms highlighted that there was “weak” client confidence amid a backdrop of economic and geopolitical uncertainty.
• The readings for both the vital services sector and for manufacturing came in well below expectations.

Economic data summary

So far as economic data is concerned, the key numbers are:

GDP – July 2025

• After an increase of 0.4% in June, growth has stalled in the month of July. The more meaningful quarterly figure to July showed a rise of 0.2% on the previous quarter and 1.2% year-on-year.
• Breaking down the three months to July in more detail, the dominant services sector delivered growth of 0.4%. The best performing sub-sectors were health and social work (+2.5%), legal activities (+3.1%), scientific R&D (+3.4%) and IT (+3.2%). The laggards were led by wholesale and retail (-1.3%).
• Production GDP fell by 1.3%, of which almost all was down to manufacturing.
• Construction GDP rose by a healthy 0.6%, led by private housing repair and maintenance (+3.8%).
• Consumer-facing services GDP fell by 0.6%.

Inflation – August 2025

• CPI inflation in August was stable at 3.8%.
• The major factors pushing inflation higher were restaurant prices, hotel costs and motor fuel, but these were offset by lower air fares and other smaller falls.
• ‘Core’ inflation (excluding the more volatile elements, such as housing and energy costs) came down to 3.6% from 3.7%.
• Service sector inflation fell from 5% to 4.7%.
• Food and non-alcoholic beverage inflation went up from 4.9% to 5.1%.

Employment

Labour force data published by the Office for National Statistics is acknowledged by ONS to be still less than ideally reliable because of low survey response rates since the pandemic, although this situation is said to be improving. Nonetheless, ONS figures show:

• Unemployment rose from 4.6% to 4.7% in the quarter to July 2025.
• Economic inactivity was 21% of the working population aged between 16 and 64.
• Vacancies in the quarter to July fell by 10k and are well below pre-pandemic levels. This was the 38^th consecutive fall.
• Pay growth was 4.8% or 0.7% after inflation is taken into account.

Interest rates

The September MPC meeting held rates at 4%, but the Bank of England will slow the pace of its “quantitative tightening” programme in the year ahead to avoid distorting jittery government bond markets.

Insolvencies – August 2025

• Individual monthly figures for business failures have been inconsistent for some time. The numbers have alternated between a rise and a fall every month since October 2024.
• On a consistent non seasonally-adjusted basis for the whole UK, there were 2,034 corporate insolvencies in August 2025. This was up by a marginal 1% compared to August 2024, but 9% lower than in July 2025.
• Looking much further back, the current figure is 27% higher than pre-pandemic in February 2020. The more meaningful rolling twelve-month total for July 2025 was 25,423. This is 5% down on a year previously and 9% down on the all-time high in February 2024.

Drilling down into the detail, the trend towards stronger creditor enforcement continues. On a rolling twelve-month basis, Compulsory Liquidations are now 17% of all company failures compared to only 14% in August 2024. Creditor Voluntary Liquidations (CVLs) have fallen back to 76% now from 79% a year ago.

What next for UK businesses?

Anecdotally, the 2024 Autumn Budget increases are causing escalating financial pain and distress for businesses in the sectors most affected, such as retail and hospitality, but this has yet to translate into higher levels of insolvencies. These sectors are now moving into their most important time of the year, the so-called ‘golden quarter’ ahead of and during the festive season. How this turns out amid widespread talk of nervous consumers reining in their spending will determine what the business landscape will look like as we go into 2026.

Amid so much uncertainty and ahead of the 2025 Autumn Budget’s measures, maintaining strong financial discipline and risk awareness are the only sensible approach for businesses.

If you are seeking professional advice for your business, Opus is here to help. You can speak to one of our Partners, who can discuss options with you. We have offices nationwide and by contacting us on 0203 995 6380, you will be able to get immediate assistance from our Partner-led team.