UK businesses began the week facing another rise in global energy prices, continuing political and economic uncertainty, and further evidence of a subdued domestic employment market. However, the day also brought more positive news for exporters as Britain completed an enhanced trade agreement with Switzerland, while stronger-than-expected results from PageGroup offered tentative signs that parts of the international recruitment market may be stabilising.

Elsewhere, Morrisons was reported to be examining a £600 million property-backed financing agreement, Chinese owner Jingye stepped up its compensation claim over British Steel, and leading financial institutions called for Britain to accelerate the digitalisation of its capital markets.

Oil prices climb as tensions return to the Strait of Hormuz

Energy markets dominated the start of the week after renewed attacks involving the United States and Iran intensified concern about shipping through the Strait of Hormuz.

Iran claimed that the strategically important waterway had been closed, although the United States disputed this and said commercial ships were continuing to receive military escorts. Shipping activity had nevertheless slowed considerably, increasing concerns about the security of global oil supplies.

Brent crude and US oil prices rose by almost 4% during early trading. The increase is particularly important for Britain because higher wholesale oil prices can quickly feed through into petrol, diesel, transport and distribution costs. UK pump prices have already started rising again following several weeks of decline.

The FTSE 100 remained comparatively resilient because gains for BP and Shell helped offset weakness elsewhere. However, Asian markets fell sharply, while technology and semiconductor shares were among the largest casualties as investors moved away from more speculative assets.

For UK companies, the immediate question is whether the rise in oil prices proves temporary or becomes another sustained inflationary pressure. Businesses in transport, logistics, manufacturing, food production and retail are particularly exposed because fuel and energy costs affect both their own operations and those of their suppliers.

A prolonged increase could also complicate the Bank of England’s task. Higher energy prices may strengthen inflationary pressures even as economic growth and consumer demand remain relatively weak.

Britain agrees enhanced trade deal with Switzerland

The UK and Switzerland have concluded an enhanced free trade agreement intended to strengthen trade in services, digital products, financial services and professional expertise.

The government estimates that the agreement could eventually generate an additional £5.2 billion of UK services exports each year. This is a long-term projection rather than an immediate economic gain, but it reflects the importance of Switzerland as a market for British financial, legal, technology, pharmaceutical and professional services businesses.

Under the agreement, professionals in sectors including finance will be able to travel between the two countries without a visa for up to 90 days each year. British companies will also be able to transfer employees to Swiss offices for periods of up to five years without being required to pass certain Swiss economic tests.

The agreement includes provisions covering digital trade and intellectual property protection. It is accompanied by plans to remove mobile roaming charges between the countries and to allow British travellers to use electronic passport gates at Swiss airports.

The deal builds on the goods agreement carried over following Britain’s departure from the European Union. Its emphasis on services is significant because services account for a growing share of UK exports, while goods exports have recently performed less strongly. UK government figures show that total services exports increased by 6.7% in the 12 months to April 2026, while goods exports fell by 2%.

The commercial benefit will ultimately depend on whether businesses take advantage of the improved access. Nevertheless, the agreement provides greater certainty for companies trading between two economies with substantial financial, pharmaceutical and professional services industries.

Morrisons considers £600m store financing agreement

Morrisons is reportedly discussing a property-backed financing agreement worth approximately £600 million with several potential investors, including US property company Realty Income.

According to reports, the proposed transaction may involve financing secured against a portfolio of Morrisons stores rather than a conventional sale-and-leaseback arrangement. Morrisons had previously appointed property adviser CBRE to consider options for raising as much as £1 billion from part of its freehold estate.

Neither Morrisons, Realty Income nor CBRE had confirmed the negotiations when the reports emerged.

The talks underline the value of the supermarket’s substantial property portfolio. Raising capital against stores could provide Morrisons with additional financial flexibility while allowing it to retain operational use of the locations involved.

However, any property-backed financing agreement would need to be assessed against the future cost of servicing the arrangement. Sale-and-leaseback and similar transactions can release significant cash in the short term but may replace property ownership with long-term rental or financing commitments.

Morrisons continues to face intense competition from Tesco, Sainsbury’s, Aldi and Lidl. Lidl recently overtook Morrisons to become Britain’s fifth-largest grocery retailer, adding to pressure on the company to improve efficiency and strengthen its market position.

PageGroup results offer cautious encouragement

Recruitment company PageGroup reported second-quarter gross profit of £197.6 million, comfortably above the £186.8 million expected by analysts.

The result was driven by improving recruitment activity in the Americas and Asia-Pacific, which offset weaker conditions in the UK and continental Europe. PageGroup shares rose by almost 13%, while competitors Robert Walters and Hays also recorded gains.

The headline improvement does not mean the UK employment market has fully recovered. PageGroup’s UK gross profit fell by 5.3%, and the company described the domestic market as “tough but stable”.

There were, however, pockets of stronger demand in executive recruitment, interim management and technology roles. The company also said that more job offers were being converted into completed placements in several overseas markets.

PageGroup expects its full-year operating profit to be broadly consistent with the current analyst consensus of £28 million. Cost reductions have produced annualised savings of approximately £40 million.

The results suggest that recruitment conditions may be approaching a more stable position, but employers remain cautious about permanent hiring. Political uncertainty, weak European growth, higher energy costs and uncertain interest-rate expectations continue to discourage companies from making long-term employment commitments.

Jingye increases pressure over British Steel compensation

Chinese steelmaker Jingye has renewed its demand for compensation from the British government following the government’s decision to assume operational control of British Steel.

The government intervened in April 2025, citing national security and the need to preserve primary steelmaking at the Scunthorpe site. It has subsequently indicated that full nationalisation remains an option.

Jingye says it is seeking what it describes as prompt and adequate compensation for its investment. The latest statement increases the possibility of a prolonged legal or diplomatic dispute over the valuation of the business and the circumstances surrounding the government intervention.

The wider issue is strategically important for Britain. Maintaining domestic steel production supports construction, manufacturing, infrastructure and defence supply chains, but British Steel has required considerable financial and political support.

The eventual cost to the taxpayer will depend on the amount of public investment required, any compensation paid to Jingye, and whether a commercially sustainable future can be established for the Scunthorpe operation.

City institutions call for faster digital market reforms

A taskforce supported by Barclays, Lloyds Banking Group, JPMorgan and other financial institutions has called on the government to accelerate the adoption of tokenised financial markets.

Tokenisation involves recording ownership of shares, bonds and other assets digitally, potentially allowing transactions to be completed more quickly and with fewer administrative processes.

The report argues that wider adoption could strengthen London’s position as an international financial centre. Estimates from Barclays and PwC suggest that the development of tokenised markets internationally could add £33 billion to UK economic output and generate £14 billion in additional tax revenue. These are projections dependent on substantial market growth and successful implementation rather than guaranteed returns.

The taskforce has proposed a 12-month programme intended to improve regulation, market infrastructure and adoption. Supporters believe Britain has an opportunity to establish an early competitive advantage, while warning that financial centres in the United States, Singapore, Hong Kong and the United Arab Emirates are moving quickly.

The challenge will be to encourage innovation without weakening investor protection, financial stability or anti-money laundering controls.

Financial services administrations increase

Separate research from restructuring adviser Kroll found that 49 UK financial services companies entered administration during the first half of 2026, compared with 30 during the same period last year.

Across the wider economy, 649 companies entered administration between January and June, an increase of 6% from the first half of 2025. Kroll attributed part of the increase in financial services failures to higher costs, regulatory pressures and the consequences of the collapse of mortgage lender Market Financial Solutions.

Kroll said the figures did not necessarily indicate a systemic crisis across the financial sector. Several of the affected businesses were intermediaries or brokers with direct or indirect links to failed companies.

Nevertheless, the increase is likely to bring greater attention to underwriting standards, regulatory compliance and the financial relationships connecting lenders, brokers and investors.

A mixed start to the business week

Today’s headlines present a mixed picture for British business.

The Switzerland agreement provides a potentially valuable opportunity for service exporters, while PageGroup’s results suggest that some international recruitment markets are beginning to improve. Proposals to modernise Britain’s financial markets also demonstrate that the City continues to search for new sources of competitive advantage.

At the same time, higher oil prices threaten to increase business costs and inflation, Morrisons is exploring ways to raise capital from its property estate, and the British Steel dispute highlights the financial consequences of government intervention in strategically important industries.

The common theme is uncertainty. Companies are continuing to invest, restructure and pursue new markets, but many remain reluctant to make large long-term commitments while energy costs, interest rates, domestic politics and international tensions remain unsettled.

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