The UK economy is at a ‘delicate crossroads’ as 2025 draws to a close, according to Steven Mason, a senior insolvency practitioner at Inquesta.
High taxes, fragile consumer confidence and lingering cost pressures are putting growing pressure on small and medium-sized businesses, especially in retail, hospitality and leisure. While falling inflation and possible interest rate cuts in 2026 offer some hope, Mason warned that survival, not success, may be the goal for many firms next year.
In comments shared with Roch Valley Radio, Mason said: “Consumer-facing sectors remain highly sensitive to shifts in confidence and spending. After the shocks of Covid and the cost-of-living crisis, some businesses are simply holding on.”
The warning comes amid signs that insolvency rates are rising, with official figures showing closures are now at a four-year high.
Mason stressed that even resilient companies are vulnerable to changes in cash flow or the loss of a major client. Global conflicts, fluctuating energy costs and patchy growth continue to fuel uncertainty.
He added that government policy in 2026 must prioritise reducing costs and cutting red tape to allow small businesses to grow. Access to finance remains a sticking point, with banks reluctant to lend despite steady borrowing costs. Late payments from larger firms are also causing serious strain on smaller suppliers.
“SMEs need a stable and predictable environment where they can invest and plan. Without action, we could see job losses rise even further,” Mason said.
Inquesta, based in Radcliffe, Greater Manchester, specialises in insolvency and corporate recovery and works with businesses across the UK.
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