The investment, announced on Monday, covers major upgrades and new facilities in Derby, Bristol, Glasgow, Rotherham and Ansty in Warwickshire. Rolls-Royce said the programme would ensure its British infrastructure can meet manufacturing demand while supporting the development of future aerospace programmes.

The largest allocation exceeds 140 million pounds for the company’s Derby operations, which are the centre of its civil aerospace activities.

The investment will fund new engineering and manufacturing facilities, improve the working environment and increase capacity for aftermarket support. The Derby works are expected to be completed in 2028.

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However, hubs have warned that it would take time for operations to ‌return to normal after the disruption left aircraft in “the wrong places.”

The hours-long disruption has increased the pressure upon the NATS, with airlines ramping up their criticism of Britain’s aviation infrastructures, while the Andy Burnham government, taking a grim view of the situation, has summoned Martin Rolfe, the agency’s chief, to explain the shutdown.

The disruption resulted in the cancellation of 2,000 flights, apart from leaving hundreds of thousands of passengers stranded at major airports across the European country.

Ryanair, Europe’s biggest airline, has called for Rolfe’s removal, while citing his role in the last system meltdown in August 2023, when cancelled flights cost operators 100 million pounds (USD 135 million).

Transport minister Heidi Alexander will reportedly hear directly from Rolfe after she summoned him to explain the fault, amid ​concerns over the resilience of the British aviation sector’s infrastructure and technological resilience.

As operations restarted, Heathrow Airport said passengers should check with their airline before heading to the airport, as schedules would have changed ‌due ⁠to the problems on Tuesday.

“We are expecting knock-on impacts as aircraft and crew reposition,” the UK’s busiest hub said in a statement.

“We know how frustrating this situation is and … are working closely with our ⁠local NATS team and airline partners to recover normal operations as quickly as possible.”

London Gatwick, Britain’s second busiest airport, remarked while advising passengers to ⁠check with their airline first.

While 150,000 Ryanair passengers got affected by the outage after it cancelled ⁠more than 200 flights, British Airways had to cancel and divert 100 flights, with another tens of thousands impacted.

Two of NATS’ previous operational glitches resulted in shutdowns in August 2023 and in July 2025. On both occasions, major airports, including Britain’s largest, Heathrow, got affected.

“I am seeking assurances that lessons will be learned and systems that support aviation are up to the job,” Alexander said on X (formerly Twitter).

Michael O’Leary, group CEO of Ryanair, told Reuters the outage was “an absolute rerun” of ​what happened in 2023, when a rogue flight plan caused the shutdown.

“Fire him. He’s been there since 2015. He is useless,” he said of ​Rolfe.

NATS said that the issue, which had impacted its flight data processing system, was resolved. It also dismissed talks about a potential cyber breach affecting its digital architecture.

“It was not the same issue as 2023. This one affected our flight data system at Swanwick. We will conduct a ‌full investigation ⁠to establish the root cause and identify any further action required,” a NATS spokesperson said.

“Recovery from today’s system issue has taken longer than we had hoped. Our system issue is now resolved; we are operating normally and working as hard as possible to clear the backlog of flights,” the agency further clarified on X.

The traffic control provider later said in another X update that it would take time to recover from the disruption, adding that “this ⁠has been a very complex recovery and has created difficulties for the entire aviation network.”

Rolfe also termed the cause of the disruption a new one. While speaking with the BBC Radio, he apologised for what had gone wrong without giving details of what had happened, apart from saying a cyberattack had been ruled out.

He later told Sky News that NATS had not “fully done the investigation” to find the reason behind the technical issue that caused the disruption.

“We don’t have an idea yet of exactly what went wrong,” the NATS boss remarked.

Airlines attack the NATS boss

Forgetting their fierce rivalry, European budget carriers Wizz Air and Ryanair came together to attack NATS and Rolfe while calling for an “overhaul” of the air traffic control provider.

“A critical national infrastructure provider should not repeatedly bring the aviation system to a standstill. NATS is simply not fit for purpose in its current form,” Wizz Air remarked.

“Following the 2023 collapse, we were told lessons would be learned. We were told that resilience would improve. We were told that the systems had been fixed. Yet here we are again,” Ryanair Chief Operations Officer Neal McMahon said.

As per Ryanair’s estimates, the losses from Tuesday’s outage were 3 million pounds so far, after it cancelled 260 flights affecting 48,000 passengers.

In 2024, Britain’s aviation regulator asked NATS to review its outage-related contingency plans after the automatic processing of flight plans malfunctioned a year earlier, causing chaos across the British airports.

The Civil Aviation Authority (CAA) too jumped into the action on Tuesday by “getting in touch” with NATS over the incident and expects the latter to share a full report.

“We will then consider ⁠whether any further steps need to be taken to help secure the safe reliability of the UK’s air traffic control system,” a CAA spokesperson said.

The outage, as per the data from the flight-tracking website Flightradar24, caused the cancellation of 1,300 flights to and from the United Kingdom.

“Another 177 flights got cancelled for Wednesday, nearly all of them at Heathrow, the country’s largest airport,” it added.

Another data point on the flight-tracking platform FlightAware said some 490 departures were delayed at six airports, including Heathrow, Gatwick, London City, Luton, Edinburgh, and Bristol, as of 1518 GMT Tuesday. Some 525 arrivals at those six airports were either cancelled or delayed.

British Airways on Tuesday cancelled/diverted 100 flights with tens of thousands impacted and said on Wednesday 190 flights had been ​cancelled as disruption continued.

NATS, a public-private partnership that ⁠is partially owned ​by airlines including British Airways and easyJet, pension funds, and the British government, paid its ​owners dividends of 175 million pounds in 2025.

Ryanair has decided to sue NATS at London’s High Court and is seeking over 7 million pounds over the 2023 outage.

The carrier, apart from aggressively pitching for the agency’s leadership overhaul, has called on NATS to reinvest its profits ​into performance improvements and hiring more staff.

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The regulator has cited the Iran war pushing up wholesale energy costs while justifying the move.

The rise, according to analysts, will undermine Burnham’s pledge to alleviate the United Kingdom’s cost-of-living pressures. The Ofgem announcement is also going to wipe out the benefits of the measures the new British PM announced last month, in which the tax got cut on electricity bills.

“High international gas prices are continuing to drive energy costs in the UK. We ⁠welcome the government’s intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter,” said Neil Kenward, Ofgem’s director general for markets.

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The deal, expected to complete in September 2026, covers five facilities in England and one in Northern Ireland that serve some of the UK’s largest supermarket chains, including Asda, Sainsbury’s and the Co-op. Financial terms of the transaction were not disclosed.

The warehouses provide ambient, chilled, frozen and bonded storage, handling around 46,000 different grocery products destined for supermarkets, convenience stores and neighbourhood retailers across the UK. GXO will continue to operate transport services linked to the sites where applicable.

The acquisition forms part of DP World’s strategy to build an integrated, end-to-end logistics platform spanning ports, freight forwarding, warehousing, distribution and inland transport across the United Kingdom and Europe.

Angela Howard, Vice President of Contract Logistics, North Europe at DP World, said the transaction would strengthen the company’s presence in key retail and consumer markets while expanding its geographic reach.

“We are delighted to welcome these six sites and the talented teams who operate them into DP World. They support some of the UK’s best-known grocery retailers and play a vital role in keeping products moving efficiently through complex supply chains every day,” she said.

“For our customers, it will be business as usual, backed by the strength, scale and investment of a global logistics business. By adding these operations to our network, we are expanding our ability to provide seamless supply chain solutions that connect ports, transport, warehousing and distribution through a single, integrated platform. This is an important step in our ambition to build a truly end-to-end logistics offering across the UK and Europe. It strengthens our presence in key retail and consumer markets, broadens our geographic reach and further enhances our ability to create value for customers,” the senior official remarked further.

The transfer is a result of regulatory requirements set by the UK’s Competition and Markets Authority (CMA) during its examination of GXO’s acquisition of the logistics firm Wincanton. The regulator concluded that combining the two businesses could reduce competition in outsourced grocery warehousing and required the divestment of Wincanton’s grocery logistics operations as a condition for approving the takeover.

For DP World, the acquisition further broadens its UK footprint beyond its flagship container terminals at London Gateway and Southampton. The company has been investing heavily in expanding its logistics capabilities as it seeks to capture a larger share of customers’ supply chains rather than relying solely on port operations.

The agreement is the second perishable logistics investment announced by DP World in the first weke of August. The company has also committed to developing a new temperature-controlled logistics centre at the Port of Antwerp in Belgium, a project expected to attract long-term investment of around 100 million euro.

DP World is also developing an automated grocery distribution centre for Tesco at London Gateway, due to open in 2029, reinforcing its ambition to become a leading integrated logistics provider serving retailers across the UK and Europe.

The post DP World expands UK logistics network with GXO grocery warehouse takeover appeared first on International Finance.

Saudi Re said the transaction will be financed from its own capital resources, with the acquisition supporting its expansion into international markets and accelerating growth.

The Saudi-listed firm said it is also looking to strengthen its presence in the Lloyd’s market, a UK-based insurance and reinsurance hub where Ada Risk operates Syndicate 2024, to develop specialized reinsurance solutions and diversify its underwriting portfolio.

London-registered Ada Risk is a holding company focused on underwriting, risk management, and the global aerospace and aviation insurance sector. Syndicate 2024 underwrites energy, marine and energy liability, ports and terminals physical damage, cargo and freight, aviation war, aviation all-risks, and specie business. The syndicate graduated from special purpose arrangement to full status in 2025 and received permission to underwrite for the 2026 year of account, having added several senior hires over the past year.

Saudi Re already operates in more than 40 countries across the Middle East, Asia, Africa, and the Lloyd’s market and holds an A-minus rating from S&P Global and an A3 from Moody’s. The reinsurer has been on an expansion drive since Saudi Arabia’s Public Investment Fund completed a capital increase in January 2025, taking a 23.08% stake and lifting Saudi Re’s capital base from SR891 million to SR1.15 billion. That deal was aimed at strengthening the firm’s financial stability and credit profile as the national reinsurer.

The Ada Risk investment extends Saudi Re’s reach into specialist Lloyd’s underwriting, an area increasingly targeted by GCC-based (re)insurers seeking exposure to aviation, marine, and energy risk outside their home markets. It also follows a broader trend of Gulf insurers and sovereign-backed investors deepening ties with the Lloyd’s market as a route to diversified, internationally rated underwriting capacity.

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United Kingdom has also taken up the co-chair’s role in the ‘Coalition to Grow Carbon Markets’, an 11-nation-backed initiative to boost corporate demand for high-integrity carbon credits, reduce policy fragmentation, and unlock billions in private climate finance for developing economies.

International Finance discussed with Dr Rich Stockdale, author of Rewilding Wealth (Rethink Press), the United Kingdom’s policy actions in accelerating the global decarbonisation efforts, by bringing carbon markets into play.

Armed with a PhD in data science, Dr. Stockdale combines a relentless commitment with visionary thinking to redefine humankind’s relationship with the natural world. He co-founded Oxygen Conservation with Oxygen House Group in 2021, and has rapidly built it into one of the world’s most impactful natural capital portfolios, valued at hundreds of millions of pounds, and actively transforming over 50,000 acres into thriving ecosystems for people and wildlife.

In this exclusive interview with the International Finance, Dr. Stockdale, a transformative leader and pioneering environmentalist on a mission to scale conservation, explains the workings of the UK’s VCM, its salient features, and how it will help the businesses transition as per the ‘Net Zero 2050’ goals.

Here are excerpts from the interview.

How does the UK’s Voluntary Carbon Market (VCM) work, especially the buying and retiring of carbon credits to offset emissions?
At its simplest, the voluntary carbon market allows organisations that restore or protect nature to generate independently verified carbon credits, which businesses can buy to compensate for their residual emissions as part of a credible net-zero strategy.

A carbon credit represents one tonne of carbon dioxide (or its equivalent) that has either been removed from the atmosphere, or prevented from being emitted. In the UK, credits are created through activities such as planting new native woodland or restoring degraded peatlands, both of which capture and store carbon over many decades.

Before any credits can be sold, the projects must be independently validated against the UK government-endorsed Woodland Carbon Code or Peatland Code by accredited bodies, such as Soil Association Certification. Once verified, the credits are issued and recorded on the UK Land Carbon Registry, a publicly accessible registry that provides transparency over ownership, transactions, and retirement, ensuring every credit can only ever be claimed once.

Businesses can then purchase these verified credits directly from project developers or through intermediaries. When a company wishes to use the climate benefit towards its own reporting or voluntary climate commitments, the credit is permanently retired from the registry. Retirement removes the credit from circulation, so it cannot be resold or double counted.

Unlike many voluntary carbon markets globally, UK woodland and peatland credits are backed by government-endorsed standards, independent verification, and a transparent public registry, giving buyers a high degree of confidence in the environmental integrity of the credits.

Our own first carbon sale illustrates how this works in practice. In 2025, we entered a partnership worth up to £1 million with Burges Salmon, which became the exclusive buyer of up to 8,000 premium UK carbon credits at £125 per tonne. Those credits are generated through native woodland creation and the restoration of ancient Atlantic rainforest at our Leighon Estate in Dartmoor, providing long-term finance for landscape-scale nature recovery.

How will the UK government’s six principles for voluntary carbon and nature markets make it easier and more credible for businesses to operate in the UK?
The six principles provide greater clarity about how voluntary carbon and nature markets should operate, giving both buyers and project developers greater confidence. Markets function best when expectations are clear, and these principles help establish a common framework for what constitutes high-integrity participation.

More broadly, the UK is positioning itself as the global market for high-integrity nature credits. While parts of the global voluntary carbon market have been characterised by inconsistent standards and declining trust, the UK is building its market around government-endorsed standards, transparent registries, and independent verification. That gives businesses greater confidence in the environmental integrity of the credits they purchase, and strengthens the UK’s position as a global leader in high-integrity nature markets.

What were the key industry suggestions made during the UK’s 2025 consultation on implementing these six principles?
Our response was submitted as part of a coalition of leading organisations from across the UK’s carbon and nature market ecosystem, representing project developers, investors, environmental finance specialists, technology providers, and land managers. Together, we focused on how the UK can build the world’s leading market for high-integrity carbon and nature credits.

We argued that government should move beyond setting principles, and create the policy foundations needed to attract long-term private investment into nature. That included enshrining the polluter-pays principle in law by requiring companies to develop science-based transition plans, and compensate for their residual emissions using high-integrity UK carbon credits, positioning the UK as a global leader in climate finance, and continuing to strengthen and promote domestic standards, such as the Woodland Carbon Code and Peatland Code. We also called for formal recognition of the Peatland Code alongside other carbon standards, and for high-integrity woodland and peatland credits to be integrated into the UK Emissions Trading Scheme.

Taken together, these measures would strengthen demand for UK credits, unlock private investment into large-scale nature restoration, and reinforce the UK’s position as the global leader in high-integrity environmental markets.

What is the role of the British Standards Institution in developing standards for engineered carbon removal and nature-based investments?
Standards bodies such as the British Standards Institution have an important role in establishing the rules and minimum standards that give markets confidence. As the market matures, however, we think the emphasis should shift from creating ever more layers of approval towards providing buyers with better information to assess risk.

Ultimately, that’s how the most successful financial markets operate. Investors don’t expect every asset to be certified as good or bad— they rely on transparent disclosure and independent risk assessments to make informed decisions. We believe carbon markets should evolve in the same direction.

Independent ratings providers, such as BeZero Carbon, are an important step in that evolution. Our Invergeldie woodland project, for example, received the UK’s first AA rating from BeZero Carbon, placing it amongst the highest-rated nature-based carbon projects globally. Combined with robust standards such as the Woodland Carbon Code and Peatland Code, that kind of transparent risk assessment gives buyers greater confidence and helps capital flow towards the highest-quality projects.

Could other countries adopt a similar Voluntary Carbon Market designation model to the London Stock Exchange?
Yes. We hope other countries will adopt similar models, but we also believe the UK has an opportunity to establish itself as the global centre for climate and nature finance.

What makes the UK distinctive isn’t any single initiative such as the London Stock Exchange’s Voluntary Carbon Market designation. It’s the ecosystem that is emerging around it: government-backed standards, transparent registries, independent verification and ratings, innovative financial products, and one of the world’s leading financial centres. Together, these create the foundations of a high-integrity market capable of attracting long-term institutional capital.

If the UK continues to innovate, the real export opportunity won’t simply be carbon credits. It will be the market architecture itself — the standards, financial products, regulatory frameworks, and intellectual property that enable private capital to flow into nature restoration around the world.

What makes the LSEG’s Voluntary Carbon Market designation unique for companies and investors?
The London Stock Exchange’s Voluntary Carbon Market designation is an important example of the market architecture the UK is building to attract private investment into nature. Its distinctive feature is that it allows companies to raise capital through public markets to finance the creation of future carbon credits, helping bridge the gap between the significant upfront cost of restoring nature, and the long-term revenues those projects generate.

More broadly, one of the biggest barriers to scaling nature restoration isn’t a shortage of projects — it’s a shortage of patient, long-term capital. That’s why innovations like the LSEG designation matter. They demonstrate how London’s financial ecosystem can develop new investment structures that connect institutional capital with high-integrity natural capital assets.

Ultimately, that’s the UK’s real opportunity. Success won’t be measured simply by the number of carbon credits traded, but by whether London becomes the world’s leading financial centre for financing climate and nature recovery.

How significant is Amazon’s expansion of its carbon credit services into the UK market for corporate decarbonisation?
It’s a significant signal that demand for high-integrity carbon credits is continuing to mature. Businesses increasingly want access to credible, independently verified carbon credits as part of their climate strategies, and platforms such as Amazon are making those markets more accessible by connecting buyers with trusted supply.

What’s particularly encouraging is that Amazon appears to be focusing on credit quality rather than simply favouring one type of carbon removal over another. The market is increasingly recognising that high-integrity nature-based removals, underpinned by robust standards, independent verification, and transparent monitoring, can play an important role alongside engineered removals. The debate is becoming less about technology and more about quality.

Ultimately, thriving markets need both supply and demand. Project developers create the high-quality environmental assets, while platforms and marketplaces help connect those assets with corporate buyers. The growth of that market infrastructure is another sign that voluntary carbon markets are becoming a more mature and investable asset class.

What role can the UK play through the ‘Coalition to Grow Carbon Markets’ in scaling high-integrity carbon markets globally?
Carbon markets are not the destination—they’re the financing mechanism. Their purpose is to mobilise private capital into restoring nature at a scale that governments and philanthropy cannot achieve alone.

The Coalition reflects an important recognition that high-integrity carbon markets will only scale if we create strong and sustained demand for high-quality credits. Project developers need confidence that there will be long-term buyers before they can invest in restoring landscapes at scale.

The UK is well placed to lead that effort. By combining robust standards, transparent market infrastructure, and clear policy signals, it can demonstrate how voluntary carbon markets can attract private investment while maintaining high environmental integrity. If successful, that model can be replicated internationally.

Our role is to help build the supply side of that market. Across our 50,000-acre portfolio, we’re restoring woodlands, peatlands, rivers, and other habitats to create high-quality carbon and biodiversity assets. Ultimately, success won’t be measured by the volume of credits traded, but by the amount of private capital mobilised into restoring nature.

How can governments and industry, through the ‘Coalition to Grow Carbon Markets’, address concerns around greenwashing and build trust in voluntary carbon markets?
Trust isn’t created through marketing — it’s created through transparency. The best way to address concerns about greenwashing is to build markets that deserve trust in the first place.

That means combining robust standards, independent verification, transparent registries, and increasingly, independent risk ratings that allow buyers to make informed decisions. Just as in financial markets, confidence comes from giving investors access to reliable information, not from asking them to accept broad claims at face value.

It’s also important that we communicate honestly about what carbon credits achieve. They are not a substitute for reducing emissions — they are a financing mechanism that enables private investment in restoring woodlands, peatlands, rivers, and other ecosystems while companies decarbonise. High-integrity nature-based projects deliver far more than carbon alone, generating benefits for biodiversity, water quality, flood resilience, and rural communities.

Ultimately, low-quality projects will continue to lose market share because buyers increasingly have the tools to distinguish quality from poor practice. That’s exactly how well-functioning markets should work.

The post UK positioning itself as global market for high-integrity nature credits: Dr Rich Stockdale appeared first on International Finance.

Despite the historic GCC deal, which saw the UK become the first one among the G7 (Group of Seven) to enter into a trade pact with the Middle East, the pressure on Starmer got unbearable. He ended up losing his popularity among his own Labour MPs.

The Starmer government’s struggle to improve UK’s stagnant living standards, along with the alleged mishandling of a £22 billion fiscal hole, brought the curtains down on the 63-year-old’s tenure in 10 Downing Street.

A lion’s share of the criticisms against the administration was directed towards its way of handling the stagnant British economy. Inflation, high energy prices, low productivity levels, rising unemployment and an underperforming SME, headwinds that arrested the European country’s growth.

A sector in distress

The SME sector occupies 99.9% of the overall British business landscape. Not only does it employ roughly 60% of the private sector workforce, but it also keeps the country’s growth engine chugging by contributing heavily in construction, professional, scientific and technical services, and manufacturing. Despite 68% of SMEs reportedly being profitable, many of them are facing hurdles on the scaling and cashflow fronts.

A 2025 report from Make UK, and think tanks Civitas and ERA Foundation, titled ‘The Growth Mission: A Blueprint for Scaling up SME Manufacturers’, made these discoveries: despite accounting for 99% of the 250,000 active manufacturing businesses in the United Kingdom, SMEs struggle to access finance during the ‘make or break’ seed to early growth stages of investment, a challenge which, if solved, could boost UK manufacturing investment by £9.2 billion annually.

“Almost two-thirds of these SMEs have ambitions to grow into large businesses over the next decade, which, if realised, could add £83 billion in value to manufacturing, and help propel the UK from the 12th largest manufacturing economy in the world to the seventh,” according to the report, a statement which gives a sad reflection on what could have been the story of the British SMEs had the government supported them.

To correct these issues and help SMEs scale up, the report made a number of recommendations to the Starmer administration, including the creation of an Estonia-style ‘British Business Burokratt Software’ tool to pool data collected by HMRC (His Majesty’s Revenue and Customs) and ONS (Office for National Statistics) that would help micro-target support to identified companies.

Another proposal was the introduction of a super-growth allowance (150% capital allowance), along with the formation of an enhanced Growth Enterprise Scheme (GEIS) to boost SME scale-up efforts.

In March 2026, exactly one year after, came the first-ever SME whitepaper from Lovey (formerly Love Finance), the United Kingdom’s fastest-growing SME lender and broker. Titled ‘The 2026 H1 SME Finance Outlook’, the research not only explored how SMEs accessed finance in 2025 but also examined their outlook, priorities and borrowing appetite for 2026.

The one similarity between the two studies is the discovery of the persistent financial pressure (tax burden and rising costs) on SMEs, while the lack of access to external finance results in missed scaling opportunities for these businesses.

Along with the independent creative market research agency Atomik Research, Lovey surveyed 504 British SME owners across the retail, manufacturing, hospitality and construction sectors between December 2025 and January 2026.

“The findings show that UK SMEs were entering 2026 with cautious optimism, balancing growth ambitions with economic pressures and a changing funding landscape. While confidence remains relatively strong, access to external finance continues to play a critical role in helping businesses invest, expand and respond to economic pressures,” the study observed.

While 82% of SMEs applied for external finance during 2025, 81% missed business opportunities due to a lack of finance. Despite 71% of the surveyed business bosses looking to seek external finance in 2026, tax burden (25%) and rising costs (24%) have remained the two biggest (and constant) growth barriers for them.

Why did 2025 become the year for ‘limited growth opportunities’ for British SMEs? The answers were rising costs, squeezed margins, and cash flow challenges. This unholy trinity created a situation where, due to the lack of funding, companies had to postpone or abandon expansion plans.

“Smaller SMEs were particularly affected. Among businesses with revenues between £500,000 and £1 million, 87% reported missing multiple opportunities due to lack of finance, compared with 82% of businesses with revenues between £250,000 and £500,000. Looking ahead, demand for finance remains strong across sectors. Hospitality businesses are the most likely to seek external finance in 2026 (89%), followed by manufacturing (71%), retail (66%) and construction (56%),” Lovey commented.

The research also highlighted regional disparities in access to funding. In the East Midlands, 96% of SMEs reported missing at least one opportunity due to lack of finance, followed by Wales (94%) and London (91%).

Unemployment numbers

In March, unemployment went up to 5.2%, the highest level since early 2021. More than 1.88 million people were out of work, an increase of 331,000 year-on-year.

Youth unemployment hit its five-year high of 14%, as 575,000 young people aged 18-24 remained jobless. Payrolled employees fell by 134,000 over 2025. Retail and hospitality got hit particularly, as 122,000 fewer people remained in payroll employment in these two sectors.

A month after, there wasn’t a big change. British businesses ​posted fewer job vacancies, with the Iran war starting to show its impact on the European country’s economy. Vacancies fell to 705,000 in the three months to April, the lowest number since the three months to ⁠February 2021.

Wage growth, excluding bonuses, stood at 3.4% in the first three months of 2026 compared ​with the same period in 2025, the slowest increase since 2020. The unemployment rate, a high-profile gauge of any economy’s health, ticked up to 5% for Q1, from 4.9% in the three months to February. The drop in payrolls in April 2026 also became the biggest since May 2020, at the start of the COVID-19 pandemic.

As per the ONS, lower-paying sectors like hospitality and retail saw some of the largest falls in payroll numbers and vacancies, with employers complaining that higher payroll taxes and a government ​reform to give workers more rights have ​made hiring more expensive.

In the words of Andrea Reynolds, a non-executive director for Berkshire Hathaway European Insurance, along with the CEO and founder of Swoop, a venture that simplifies the process of sourcing funding for SMEs, “Behind every redundancy, every unfilled vacancy, every shuttered shop front, there’s a small business owner who’s had to make an impossible choice.”

“From April 2025, employer National Insurance contributions rose from 13.8% to 15%, while the threshold at which employers start paying dropped from £9,100 to £5,000. For a business employing someone on £30,000, that’s an additional £866 per employee, per year, which many small businesses simply cannot absorb. Even for those that can, absorbing costs means lower profits. Lower profits mean less investment. Less growth. Fewer jobs,” she said in her article for EliteBusiness.

To complicate things further, every cycle of increase in the National Minimum Wage will make 2026 an expensive year for British businesses, amid headwinds like the Iran war and the resultant supply chain disruptions.

As per the Centre for Policy Studies, employer NICs (National Insurance Contributions) for a minimum wage employee will rise from £1,617 to £2,583 this year alone. Talking about a minimum wage increase, the latest ratio stands at £12.71 per hour for workers aged 21 and over, adding up to £900 more per year for full-time workers.

As per Reynolds, labour-intensive yet tight-margin sectors like hospitality, retail and caregiving; each wage hike cycle creates situations like job cuts, reduction in operational hours or, in the worst-case scenario, shutdown of the entire business. Her blunt advice to the Starmer administration was: if you want to tackle the growing menace of unemployment, you need to ease the cost of doing business for SMEs.

“Raise the VAT threshold. Immediately. The current threshold is £90,000, but if it were linked to inflation, it would be £103,000. Businesses are becoming VAT liable through inflation, rather than growth. The Federation of Small Businesses estimates VAT compliance adds £4,100 on average to a business’s running costs. I also know that struggling to pay the VAT bill can critically injure the cash flow of otherwise profitable businesses. So, raise the threshold and thousands of businesses will save thousands of pounds,” she stated.

Reynolds also suggested measures like reviewing employment costs.

“National Insurance, the national minimum wage, and business rates don’t exist in isolation. Each one compounds the others. Small businesses need breathing room, not a cascade of incremental tax rises that look manageable individually but are crippling collectively. Make it easier to access finance. Many SMEs are facing a cash flow crunch. They need working capital, not lectures. During Covid, government-backed schemes like CBILS and RLS improved access to alternative finance and simpler application processes. The government can pull this lever if they really want to,” she remarked.

Geopolitics poisons the cocktail

While the Iran war and the Hormuz stalemate have created one of the worst energy shocks the world has ever experienced, British SMEs will face rising energy bills as heating oil costs rise. As per The Guardian, about 7% of all small and medium-sized companies warm their properties and provide hot water using heating oil, whose price, in some cases, has more than doubled in recent weeks.

The situation has got complicated for businesses based in rural areas. Since they are not connected to the gas grid, they have to depend on heating oil. According to the Federation of Small Businesses (FSB), the material is used by about 17% of rural SMEs. And some of their members have already started rationing their fuel use to cope with the sharp rise in prices.

The FSB, which represents about 200,000 businesses and sole traders, has called on the United Kingdom’s competition watchdog to include the SME sector in its investigation into the price rise in the heating oil market. The trade body is equally apprehensive about rogue energy brokers taking advantage of the market crisis to push small companies into signing up to long-term deals on bad terms.

As per corporate restructuring specialist Begbies Traynor Group (BTG), the number of UK businesses in ‘critical financial distress’ has soared by more than a third. Hotels and leisure firms are particularly hard-hit, with mounting labour costs, increased tax burdens and now the Iran war making things difficult for them. The study came up with a disturbing ratio: a growing number of companies edged closer to collapse in Q1 2026.

Businesses considered to be in ‘critical financial distress’ surged by 36.9% to 62,193 for the period, compared with the same quarter in 2025. Concurrently, the number of businesses experiencing ‘significant’ financial distress rose by 9.6%, reaching a total of 634,867.

“Firms have contended with a series of tax increases throughout the year, including adjustments to national insurance contributions, further squeezing their finances. It also comes amid a backdrop of shaky consumer confidence, particularly affecting sectors reliant on discretionary spending habits. These challenges have been exacerbated by energy and materials inflation following the outbreak of war in the Middle East towards the end of the quarter,” BTG stated.

Recession fear

Add the S&P ‌Global’s preliminary UK Composite Purchasing Managers’ Index, which in May 2026 tumbled to 48.5 from 52.6 in April, its first reading ​below the 50.0 growth threshold since April 2025, indicating the kind of drop in activity British companies have been going through since 2025, with ‌the Iran war only piling up more problems for entrepreneurs.

Even though manufacturing firms reported a rush of orders, ‌the increase was largely due ⁠to clients trying to get ahead of possible further price increases or supply chain problems. Also, businesses are unsure about how long the energy prices will remain in the higher territory. Business owners have scaled back their hiring plans ​for the 20th month ​in a row, with expectations for future business being the lowest since April 2025.

The recession fears, especially in the SME circle, have hit their two-year high, according to iwoca’s SME Expert Index, which emerged in May.

As per the survey, 70% of participating finance brokers saw their SME clients getting worried about the rising energy prices, with over three-quarters (78%) expecting disruption to supply chains to negatively impact the business performance. Over half (54%) talked about entrepreneurs getting mentally prepared about the prospect of a recession, the highest level since Q3 2023 and up from 42% in Q4 2025.

Colin Goldstein, Chief Commercial Officer, UK, at iwoca, said, “These numbers reflect what we’re hearing from brokers – small businesses are worried, and the concerns are stacking up. Costs, inflation, supply chains: none of these have easy fixes. What SMEs can control is making sure they have the right financial backing to absorb shocks and keep moving. That’s where we come in, and it’s where we’re focused.”

Another report from the Item Club gave a harrowing stat: the UK is expected to lose around 163,000 jobs in 2026, with elevated energy costs, disrupted supply chains and squeezed household spending putting a dampening outlook on the overall economic health. The worst affected will be manufacturing and construction firms that are facing soaring operating costs.

All eyes on the Andy Burnham

Andrew Murray Burnham, a British politician who has been serving as Member of Parliament for Makerfield since June 2026, and is expected to take over from Starmer, needs to fix quite a lot of things. SMEs will be one among them.

It’s not like the Starmer administration didn’t do anything. In August 2025, it launched a scheme called ‘Backing Your Business’, under which a sweeping £4.5 billion funding package was announced to support SMEs. Then in March 2026, government departments, for the first time, set individual spending targets for SMEs to deliver over £7.4 billion a year to British businesses by 2028.

Billions were allotted separately to boost supply chains, with the goal of creating a thriving private sector that will drive GDP growth and generate wealth across the European country, apart from creating a massive number of jobs.

However, things on the ground look totally different. The SME sector looks squeezed, with recession fears kicking in among the business owners. The government wanted them to create jobs. The Item Club report says otherwise: potential loss of 163,000 jobs by this year-end.

Energy costs have continued to rise, forcing Chancellor Rachel Reeves to announce increased support for energy-intensive companies through the ‘British Industry Competitiveness Scheme’, which will be important for the UK construction and infrastructure supply chain, as it provides support for the manufacturing of steel, cement, ceramics, chemicals, glass, and heavy manufacturing.

During the peak of Iran war, Starmer promised to examine ‘every lever that’s available’ to help British households and industries cope with the crisis.

Ministers were reportedly told to work on support packages ‘that proved their worth during previous crises’. While the current energy price cap expires this summer, Starmer, in the days leading up to his shock resignation, indicated that this support would manifest as a fuel allowance for winter 2026, with the price shocks expected to continue for a good part of 2026.

To deal with the supply chain disruptions, the government is investing £100 million ($133 million) in reopening a carbon dioxide (CO₂) plant in Teesside. The facility, operated by Ensus at the Wilton International industrial site, had been mothballed since September 2025 after a trade deal with the US removed a tariff on American ethanol imports, making domestic production unviable.

While the move is going to take care of the CO₂ generation-related requirements to serve purposes like keeping packaged food fresh and carbonating soft drinks, it is also going to assist domains like water treatment, healthcare and the nuclear industry.

Elevated energy prices and supply chain disruptions will be the realities the British SMEs will have to deal with for the next few months. Burnham’s task should be a straightforward one: keep the assistance, both monetary and supply chain-wise, going, because SMEs are the nation’s growth engine.

The post Save SMEs: Labour Government’s Toughest Challenge appeared first on International Finance.

In a series of papers published on Monday (July 6), the Department for Business and Trade (DBT) said its research demonstrated that digitalising processes, financing and documents can reduce cost, time spent and manual errors for companies trading across borders.

“But in practice, adoption remains low, particularly among SMEs, and firms face a range of difficulties, including patchy customs acceptance, platform interoperability and identity infrastructure,” DBT commented, while adding that the findings would help shape the approach of the Labour government, awaiting PM-designate Andy Burnham to take over the proceedings at 10 Downing Street, to build SME capability in trade digitalisation that will make the exchange of goods simpler, faster and more digital.

“The DBT examined several pilot projects, including digital trade corridors between the UK and France, Germany, Japan, New Zealand and Taiwan, commissioning reports from industry partners such as Boex, LogChain and Ipsos,” the department said.

One of the DBT’s papers gave the example of UK-based UniSim, an SME that exports healthcare training technology to mainland Europe, which was able to reduce the number of paper trade documents it produced by 90%, cut administration time per shipment by 50% and reduce overall costs by 2%.

Another research document cited a pilot into trade finance interoperability, which found that Lloyds in the UK and MUFG in Japan were able to save costs and limit risk by carrying out a documentary credit transaction digitally, using Enigio’s trace:original platform.

“The transaction was delivered by the Teesside University Digital Trade Testbed, alongside the International Centre for Digital Trade and Innovation (iC4DTI) and the International Chamber of Commerce UK, which have long advocated for moving away from paper,” the document mentioned.

However, as per the DBT, barriers to wider adoption go beyond technical challenges.

SMEs often lack time, resources and specialist knowledge to support a transition to fully digitalised processes and tend to be unaware of digital trade provisions within existing trade agreements. Though many companies were comfortable with basic digitalisation, such as emailing PDF invoices and uploading data to third-party couriers, the use of more complex documents such as electronic bills of lading remained rare,” the department said.

The study papers also discovered a “misalignment on trade finance”, where the promise of improved access to credit “did not resonate with small businesses”.

As per the DBT, “Trade finance lenders often struggle to offer SMEs a fully digital solution because different technology platforms are not connected. Even if a bank can accept an electronic bill of lading from several different providers, it may face further difficulties if customs authorities in destination countries do not recognise the particular platform being used.”

“Businesses will be more likely to move away from hybrid processes when digital documents become consistently accepted by intermediaries and regulatory authorities across the whole corridor, not just inside one firm or platform,” one of the digital trade corridor pilots found.

The research papers also contained a range of recommendations for the UK government and Burnham to consider.

‘Intermediaries from both logistics and finance noted that for [electronic trade documents] to be adopted widely, the government needed to act as a central actor to connect different systems, such as establishing a centralised digital identity registry and a unified trade portal. A digital identity registry would allow banks to verify small businesses immediately and process electronic documents with confidence,” it said.

The report also advised the DBT to make digital processes mandatory, such as requiring certain customs documents to be provided electronically by default.

“Enforcing a shift towards digitalisation would help overcome a widespread reluctance to change, particularly among SMEs. Voluntary adoption is slow partly due to cultural resistance and a prevailing ‘if it isn’t broken, do not fix it’ mentality. Intermediaries noted that rapid change only occurs when it is required, such as global shipping lines demanding electronic bills of lading. It suggested this,” it added further.

“The DBT should also continue to explore further trade agreements, including digital and free trade agreements, as evidence suggests that, even with low awareness, digital trade provisions are helping to facilitate greater use of digital tools and practices,” another study paper commented.

The post UK eyes course correction after research advocates trade digitalisation appeared first on International Finance.

Britain is preparing to spend more on its military than at any point in the last thirty years. The plan covers everything from stealth fighter jets and nuclear submarines to drones, artificial intelligence, and new accommodation for troops.

It positions defence not just as a security matter but as an economic one, with the spending uplift projected to create nearly 60,000 extra direct and indirect British industry jobs by the end of the decade, taking total defence-related employment to more than half a million.

But behind the headline numbers lies a more complicated story, one of an economy under strain, a government in political turmoil, and a threat from Russia that is growing faster than any spending plan can move.

What the Plan Actually Does
The DIP is built on the 2025 Strategic Defence Review, which concluded that Britain’s Armed Forces needed to modernise urgently and move towards what the government calls “warfighting readiness.” It confirms substantial investment in artificial intelligence, autonomy, cyber capability and digital integration, while maintaining major commitments to combat air, the nuclear deterrent and wider force modernisation.

The headline programmes are substantial. More than 8 billion pound will go to the Global Combat Air Programme (GCAP) over the next four years, developing the next-generation stealth fighter jet for the Royal Air Force alongside Japan and Italy.

More than 63 billion pound over the same period will strengthen the United Kingdom’s nuclear deterrent and fund Dreadnought and SSN-AUKUS submarines, a new warhead, and other crucial nuclear work. The government is also purchasing 12 F-35A aircraft and joining NATO’s nuclear sharing mission for the first time.

On land, the plan backs the long-troubled Ajax armoured vehicle programme, the upgraded Challenger 3 main battle tank, and the Boxer wheeled armoured vehicle, within a 19.2 billion pound land domain allocation. A further 26 billion pound over the next decade will go to Project Royal Oak, the biggest naval base upgrade in over 45 years, including major investments at Barrow and Plymouth.

And for the first time, there is serious financial weight behind the technology of future warfare. The Strategic Defence Review signalled that drones, AI and autonomous systems would become central to future conflict, and the Investment Plan gives that vision real financial backing, including 115 million pound to raise the UK’s defences against AI-related threats.

A Nation That Cannot Easily Afford It
There is one critical context that no amount of bold language can paper over, namely, Britain’s struggling economy.

UK GDP is expected to grow by just 0.7% to 1.1% in 2026, depending on the forecaster. The economy actually contracted by 0.2% in the first quarter of the year. Public sector net debt stands at 93.8% of GDP, at levels last seen in the early 1960s, and the government borrowed 132 billion pound in the financial year ending March 2026. Rising energy prices, driven partly by Middle East instability, are pushing inflation back up and keeping the Bank of England cautious about cutting interest rates.

To fund the DIP without blowing up its fiscal rules, the government has had to make difficult choices elsewhere. The package is funded primarily by reallocating budgets from across government departments, with other departments asked to contribute one penny in every pound of their capital budgets.

In practical terms, that means schools, hospitals and infrastructure projects are quietly absorbing cuts so that tanks and submarines can be funded. The government says it has identified 10.3 billion pound in savings now, with a further 4.7 billion pound to be confirmed at Budget 2026.

Some of the pain is visible inside the defence budget itself. Military housing improvements have been delayed. Several programmes have been restructured or cancelled to free up cash.

The DIP openly acknowledges that it inherited a programme in which 47 of 49 major projects were delayed or over budget. That is a sobering baseline from which to launch the most ambitious military spending surge in a generation.

A Minister Quits in Protest
The tension between what the military needs and what the Treasury is willing to provide became very public last month when Defence Secretary John Healey and Armed Forces Minister Al Carns both resigned.

In his resignation letter, Healey accused Prime Minister Keir Starmer of failing to commit the resources needed to defend the country. He wrote that Starmer had been “unable,” and the Treasury “unwilling,” to provide what the nation needed at a time of rising threats. Without adequate funding, he said, he was being forced to make decisions that would reduce the readiness of the Armed Forces, increase the risk to personnel on operations, and could make the country less safe.

Healey also turned the Prime Minister’s own words against him, citing Starmer’s warning at the Munich Security Conference earlier in the year that Russia could attack NATO as soon as 2030.

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The resignations, the seventh and eighth ministerial departures in a month from a government already reeling from collapsed poll ratings, threw the DIP process into confusion. Dan Jarvis was appointed as the new Defence Secretary, inheriting a plan that had been delayed for months and a department deeply frustrated by the pace of Treasury decision-making. The episode laid bare a fundamental tension at the heart of British defence policy.

The political will to spend exists, but the economic room to do so is tighter than the rhetoric suggests. Analysts at the Institute for Fiscal Studies note that the government has not set out how it will pay for around a third of the increase, leaving an average of 1.2 billion pound a year to be decided at a future budget, with further impacts on other areas of spending, tax, or borrowing to follow.

The Recurring Recruitment Problem
Money can buy equipment. It is much harder to buy people, and Britain’s Armed Forces are running short of them.

The trained full-time force stood at 126,740 on 1 April 2026, down from 133,570 in April 2023, leaving the forces nearly 6,830 personnel below their level three years ago. While recruitment improved slightly this year, the deeper problem is retention.

Voluntary departures account for approximately 60% of outflow, as mid-career professionals with specialised skills leave for better-paying civilian roles.

The DIP attempts to address this with a nine billion pound investment in military housing over ten years, along with pay improvements and recruitment reforms. But housing alone will not fix a culture problem that stretches deep into military life. The Army is smaller than at any point since the Napoleonic era. Recruitment targets have been missed every year for the better part of a decade.

Russia Is Not Waiting
While Britain deliberates, Russia is not standing still. Dutch military intelligence has warned that Russia could build up enough combat power for a regional challenge to NATO within a year after fighting stops in Ukraine, aiming to fracture political unity in the Alliance rather than defeat it militarily outright.

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The same assessment noted that the Russian armed forces have not only grown larger but have also become more effective than before the war, with significant qualitative improvements in unmanned systems, command and control, and battlefield adaptability.

In 2026, Russian defence spending is projected to reach 180 billion pound and, when adjusted for purchasing power parity, the effective amount Moscow will spend is estimated at USD 400 to USD 500 billion.

Russia has already moved its economy onto a war footing, drawing hundreds of thousands of workers into its defence industrial complex and sustaining large-scale weapons production despite Western sanctions.

Incidents have already tested the edges of the threat. In September 2025, 19 drones entered Polish airspace. Three Russian MiG-31 fighters violated Estonian airspace for over ten minutes. In January 2026, Russia struck western Ukraine just 70 kilometres from the Polish border with an intermediate-range missile, a move the UK, France and Germany jointly condemned as an unacceptable escalation.

Is Britain Ready?
The DIP is a serious document. It is the most comprehensive military spending plan Britain has produced in decades, and it signals a genuine acceptance that the post-Cold War holiday from history is over. But serious analysts are clear-eyed about its limits.

A funding hole of 30 billion pound to 45 billion pound remains between current commitments and the 3% of GDP target, money that is desperately needed to retrofit, re-equip and retrain existing forces for modern warfare. Britain is also not spending in a vacuum. Germany has embarked on its largest military expansion since reunification.

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Poland is spending around 5% of GDP. The Nordic states continue to increase investment. Viewed internationally, Britain’s settlement looks closer to keeping pace with an accelerating field than establishing any decisive lead.

Britain is not ready enough yet, but it is moving in the right direction, slowly, under fiscal constraint, and with more political turbulence than the moment demands. The DIP is a necessary foundation.

Whether it becomes an adequate one will depend on decisions not yet made, budgets not yet confirmed, and a Treasury that must eventually reckon with the fact that security is not a line item that can be deferred until the economy improves. In the Europe of 2026, that moment of reckoning may arrive sooner than anyone in Whitehall would like.

The post Can Britain’s 298 billion pound ‘Defence Investment Plan’ keep the country safe? appeared first on International Finance.

The trade deal comes with the potential of boosting the United Kingdom’s economy by an estimated 3.7 billion pounds (USD 4.9 billion) every year, apart from increasing wages by 1.9 billion pounds in the British mainland (on an annual basis) in the long run, said the UK’s Department for Business and Trade (DBT), while announcing the agreement.

“The UK could see a boost to growth and higher wages for decades to come after becoming the first G7 country to secure a trade deal with the Gulf Cooperation Council (GCC) today — strengthening our economic partnership with the region, supporting jobs in the long term, and bolstering domestic resilience. The deal with the GCC, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, reflected the UK’s solidarity and long-term cooperation with its Gulf partners,” the DBT said.

“The deal will remove an estimated 580 million pounds in duties a year, based on current UK exports to the GCC, once the agreement is fully implemented, with 360 million pounds of this amount ‘to be removed on day one of the agreement entering into force’,” it stated further.

British exports of cereals, cheddar cheese, chocolate and butter will likely become tariff-free under the terms of the deal. The deal was the fifth in the line for the former European Union (EU) member, following similar arrangements with India, the United States, the EU and South Korea.

Sectors like automobile, aerospace, electronics and food and drink will get benefits too. In return, the European country has lowered tariffs on the GCC’s ⁠main exports to Britain. It is worth mentioning that the import of energy products is already tariff-free.

The deal will also serve as a breather for Starmer, who is currently facing challenges in terms of dealing with the fallout of the Iran war, with terms like “stagflation” and “recession risk” dominating the discourse among the analysts.

“At a time of increased instability, the announcement sends a clear signal of confidence – giving UK exporters the certainty they need to ⁠plan ahead,” Britain’s Trade Minister Peter Kyle said.

On the services front, the trade deal will ensure that Gulf businesses could expand in the United Kingdom without facing new barriers.

The post Breather for Keir Starmer as UK pulls off GCC trade deal appeared first on International Finance.