UK Economy review May 2025:
🔄 UK-EU Agreement
- New trade deal signed with the EU
- Includes easier food export rules, youth exchange (Erasmus+), and reduced border checks
- Some concerns raised by fishing industry
🛡️ Support for Defense SMEs
- New government package to boost defense innovation
- Faster equipment procurement (6 years → 2 years)
- £400 million innovation fund launching by July 2025
- New defense tech marketplace pilot underway
⚠️ Financial Distress Rising
- Over 45,000 UK businesses in “critical financial distress” (Q1 2025) according to Begbies Traynor.
- Worst-hit sectors: hospitality, retail, travel
- Rising costs from tax, NI, and minimum wage increases are key factors
💼 SME Optimism & Investment
- 92% of SMEs feel positive about growth this year (KPMG survey)
- Focus on investing in:
- Tech and automation
- Expansion into EU and North America
- R&D for innovation
🔐 Cybersecurity Law Coming
- New Cyber Security and Resilience Bill on the way
- Will require more cyber risk reporting and compliance
- Aimed at protecting UK infrastructure and digital business
🏦 Protection from Bank Account Closures
- From April 2026, banks must give 90 days’ notice before closing business accounts (unless criminal activity involved)
🧾 New Sanctions Check for Landlords (Important if you rent business or residential property)
- Failure to do so may lead to criminal penalties
- From 14 May 2025, landlords must check tenants against the UK sanctions list
📊 Key Takeaways for Business Owners
- Trade Opportunities: New international agreements may open up markets and reduce costs, particularly in the food and manufacturing sectors.
- Consumer Spending: The potential reinstatement of tax-free shopping could boost tourism-related revenues.
- Energy Sector: Investments in clean energy infrastructure may present opportunities for businesses involved in renewable energy and related industries.
- Regulatory Environment: Ongoing discussions around competition policy and digital regulation may impact various sectors, necessitating close monitoring.
Staying informed about these developments will be crucial for strategic planning and identifying growth opportunities in the evolving economic landscape.