UK Economy review June 2025:
What small businesses need to know
June has been a busy month for the UK economy, and there’s a lot for small businesses (SMEs) to watch. Here’s a quick, easy-to-read roundup.
🏦 The Economy at a Glance
- The Bank of England kept interest rates at 4.25%.
They’re waiting for inflation to cool more before making any cuts. - Growth is slow.
Experts think the economy will grow by just 1.2% this year and 1.0% next year.
Rising costs, global trade problems, and uncertainty are big challenges.
💸 What’s Happening with SME Funding?
- Banks are lending more to small businesses.
Lending rose by 30% compared to last year – the best since 2022. - But many SMEs still face a funding gap.
Some can’t get the loans they need or find the process too hard. - Larger loans are on the rise.
More businesses are taking out loans over £100k to grow — especially in tech, healthcare, and logistics.
🚀 Business Confidence & Growth
- Many small business owners are feeling positive.
68% say their business is resilient, and 73% expect to grow in the next 12 months. - AI and tech are hot topics.
Nearly half of SMEs are exploring new tools to save time and boost profits. - Upskilling is a priority.
70% of SMEs are planning training and hiring this year to stay competitive.
🏛️ What’s the Government Doing?
- New SME champions appointed:
- Alex Depledge will advise on support for entrepreneurs and scale-ups.
- Emma Jones CBE will fight late payments – a big pain point for small firms.
- Help for defence sector SMEs:
The government is encouraging small firms to get involved in UK defence supply chains – more contracts and funding could follow.
📌 Takeaway for SMEs
✅ Check if you can access new funding.
✅ Explore ways to use AI or automation.
✅ Look into staff training or apprenticeships.
✅ Keep an eye on interest rate news in August.
✅ Watch out for government support in the next Budget.