Business news live: Unemployment at four-year high with firms ‘feeling the heat’

Fresh pasta specialist Pasta Evangelists are planning to open 100 new restaurants, creating 1,500 jobs.

The plan is to invest £30m in new openings including half in so-called ghost kitchens or dark kitchens which essentially prepare food for takeaways but are not sit-in locations.

“If you are just doing delivery only you can obviously only be making delivery-only cash,” Finn Lagun, co-founder, said to The Times. “But if you dine in as well, you get the dine-in cash, alcohol sales and offer our events like pasta-making experiences, which are very high margin.”

The Government has appointed insolvency specialists to step up planning for Thames Water in case the troubled water company collapses.

Environment Secretary Steve Reed signed off the appointment, with Sky News reporting FTI Consulting will act as an administrator in case Thames fails to secure funding from lenders.

Contingency plans could see Britain’s biggest water firm placed into a special administration regime (SAR), meaning it would be put into an insolvency process.

Universal Credit claimants have reached a record eight million, according to official figures published on Tuesday. This unprecedented number for July 2025 marks the highest level since the benefit‘s introduction in 2013.

The latest data reveals a significant surge of over a million people in just one year, up from 6.9 million claimants in July last year.

Universal Credit is a payment designed to assist with living costs, available to those in low-income employment, as well as individuals who are out of work or unable to work.

The steep rise in the past year has been driven almost entirely by people who are not required to work, with 3.7 million in this category in July – a rise of 39% or 1 million since the same time in 2024.

The UK bank Close Brothers have launched a new team called Scale Up, dedicated to helping small and medium-sized businesses grow.

It surrounds firms with facilities up to £350,000 and managing director George May said small firms getting “funding at the earliest stages remains one of the biggest challenges”, adding:

“Whether it’s a new start or a business scaling rapidly, our products now are now suitable from inception to £1bn+ in revenue, with specialist teams across invoice finance, asset-based lending, and syndications.”

There are around 5.5m SMEs in the UK, which together account for more than 60 per cent of the total private sector workforce.

More than half of Brits (51%) are “keeping secrets” about money, says Shawbrook Bank after a recent survey – with almost a quarter (22%) saying they keep financial details from their partner.

That’s not always for negative reasons, with 24% saying they are saving on the quiet to surprise someone else.

Sally Conway, Savings Expert at Shawbrook Bank said: “It’s clear that many of us are keeping money secrets – whether it’s to treat ourselves, surprise a loved one, or simply because we don’t think it’s worth sharing. But when it comes to savings, being more open and proactive can really pay off.

“Keeping quiet about our finances often goes hand-in-hand with not taking action, like staying loyal to the same bank or leaving money in low-interest accounts. Even a small increase in interest rates can have a significant long-term impact. By being more open and engaged with our savings and with the right account, we can ensure our money is working as hard as possible. And that’s one secret worth sharing.”

US firms are likely to benefit from pre-Christmas certainty in a boost overall for global economy, after an extension was agreed between Donald Trump and China over a trade deal.

The extension should allow firms to plan and buy in from overseas ahead of the important Christmas period, without fears of raised tariffs making products more expensive.

Susannah Streeter, head of money and markets, Hargreaves Lansdown, explains the situation:

“There’s more optimism in the air as a tariff truce between the US and China holds, with hopes the global economy will withstand the trade blow a little better.

“Oil prices have crept higher in expectation of higher demand for energy around the world. The FTSE 100 has opened higher, even though the UK labour market shows more signs of deterioration. Nevertheless, the picture is broadly stable, and investors appear to be taking a glass half full approach to the snapshot.

“A longer-lasting trade deal with between China and the US looks to be on the cards, after Trump granted another extension to talks amid a warming up of relations between the two nations.

“The delay on imposing crippling US tariffs on Chinese goods will be welcome news, especially for American retailers in the run-up to the crucial Christmas season. It will enable companies to import clothing electronics and toys at a lower tariff rate of 30%, and will provide much needed certainty, at least for the short term, on costs.”

As noted earlier, it’s not just that unemployment remains at elevated levels – the number of vacancies they can turn to is also diminishing.

Danni Hewson, AJ Bell head of financial analysis, explains the dilemma businesses are facing right now.

“In a nutshell, if you are looking for a job today, you’re going to find it much tougher than you would have just a year ago,” she said.

“Firms have had to shoulder big tax and wage increases; they’re worried that further tax hikes could be coming down the track and they’re being cautious.

“That caution is manifesting itself in recruitment decisions. They’re putting off taking on new staff and they’re not replacing many of those who leave.

“There will be plenty of speculation about the role AI might be playing in those decisions, but money will be at the forefront of employers’ minds and the cost of labour has weighed on firms’ ability to grow.

“It’s a slow erosion rather than a seismic shock, but the cooling trend will undermine any expectation that the supercharged growth that the government promised just a year ago might be rediscovered at the back end of the year.

“It’s not surprising that the decline has been concentrated in the narrow-margined retail and hospitality sectors.

“There are some areas of growth, in particular the numbers employed in health and social work has increased but that has been offset by declines elsewhere.”

As a reminder, the triple lock on state pensions means it rises each year by whichever is highest out of: inflation, wage growth or 2.5%.

That means today’s wage data is important and will factor in to potential calculations for the state pension’s change in payments.

“This isn’t the crunch month for the triple lock, but we’re not far off now,” explained Sarah Coles, head of personal finance at Hargreaves Lansdown.

“Total pay is up 4.6% in the year to April-June, and it’s the May-July figure that counts for the triple lock. Pay growth has eased in recent months, and if this trend continues, we can expect wage inflation to be between 4% and 4.5% when it counts.

“Given that the Bank of England forecasts inflation at 4%, we might expect the state pension to rise by between 4% and 4.5% – to between £12,451 and £12,512.

“This would bring it within touching distance of the personal allowance – so anyone with even a very modest personal pension income could end up paying income tax.”

Jobs figures released today make it unlikely we’ll see an interest rate cut by the Bank of England next month, the Institute of Chartered Accountants in England and Wales say.

We’ll preface this by laying out: very few analysts have been expecting one straight after the August cut.

That was even less likely following the two-vote close call we got last week.

A quarterly rate cut has been the theme all year, making November always the more likely date to look at for the next one.

Still, the ICAEW are a noted organisation and the explanation behind jobs cuts is well worth a note.

Suren Thiru, ICAEW Economics Director, said:

“These figures signal growing turmoil in the UK labour market, with April’s leap in employment costs and a flagging economy pushing more businesses to actively cut headcount and cap pay awards.

“Wage growth is likely to weaken over the course of the year as softening economic conditions, rising redundancies and elevated staffing costs increasingly hinder pay settlements.

“The UK jobs market is facing more pain in the coming months with higher labour costs likely to lift unemployment moderately higher, particularly given growing concerns over more tax rises in this Autumn’s Budget.

“While these disheartening figures will reassure rate-setters that last week’s policy loosening was the right call, the pace at which the labour market is currently cooling is unlikely to be sufficient to prompt another rate cut in September.”

As a KPMG study lays bare years of falling job openings, and with the unemployment figure refusing to shrink, Britain’s bosses are stuck in hiring limbo that only Rachel Reeves can get them out of, says James Moore…