Rising costs are damaging business investment and undermining the government’s efforts to raise living standards, the CBI has warned the chancellor, John Healey, ahead of his first major economic speech and the budget on 28 October.

In a 75-page report drawing on cross-sector surveys and evidence from trade associations, the industry confederation said businesses paid almost £345bn in taxes in 2025-26. That was 12.7 per cent higher than the previous year and represented 31.3 per cent of all UK tax receipts.

Employer national insurance contributions, which were increased in the Labour government’s first budget in 2024, rose to £123.1bn in 2025-26, according to the CBI’s analysis of business tax contributions. That was a 28 per cent increase year-on-year and meant the levy overtook corporation tax as the largest single source of business tax revenue.

The report also found that UK non-domestic electricity prices were about 45 per cent above the median of G7 countries in 2023 and 2024.

The CBI called on the government’s new cost of living taskforce to prioritise cutting business costs. Rain Newton-Smith, the CBI’s chief executive, said Andy Burnham was right to put the cost of living at the heart of his new government but warned that “business costs are kitchen-table costs too”.

“When firms are forced to absorb higher taxes, energy bills and regulatory costs, the consequences are weaker investment, fewer jobs and less scope to raise wages,” she said.

“Business is the economic engine that powers better public services, creates jobs and raises living standards, the very things we need to revitalise our communities and help them prosper.”

The report identified four barriers holding back investment: labour and energy costs; fragmented rules that raise compliance costs; unnecessary regulatory friction with the EU; and tax complexity. It called for measures in the budget to ease what it described as the most significant pressures, from employment costs, energy bills and business rates.

The CBI’s members include some of Britain’s largest employers, among them Tesco, Centrica and Lloyds Banking Group, as well as trade associations covering retail and hospitality, food and drink manufacturing, construction and energy.

Healey has said he is as concerned about the cost of business as about the cost of living. In his first address to the House of Commons as prime minister, Burnham pledged to “bring back hope” and said life was “too expensive and too hard for too many”, but he declined to say whether taxes would rise in the budget. He also said his administration would be “grounded in fiscal responsibility”, as the cost of government borrowing reached its highest level in almost two decades.

The British Chambers of Commerce made a similar case in its own submission to the chancellor. Its research found that domestic policies have increased the costs facing a typical small or medium-sized business by 70 per cent over the past decade.

The BCC proposed cutting national insurance contributions for under-25s, reducing energy taxes and business rates, and providing greater support for exporters. It said the measures could be partly funded by replacing the triple lock on pensions, and urged Healey to “back business, cut costs and deliver growth”.

Shevaun Haviland, the BCC’s director-general, said: “We know the government is in a fiscal bind and its choices are limited. But support for business is not just money out the door, it generates vital economic returns. Easing cost pressures will give firms breathing space to create jobs, investment and growth. Right now, too many businesses are being held back by ever increasing bills.”

The two submissions follow earlier CBI warnings against further tax rises on business under the previous chancellor, Rachel Reeves.

The government was approached for comment.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

Zoopla, the UK’s second-largest property website, returned to a pre-tax profit of £13.3m in 2025 despite a 1 per cent fall in revenue to £83.2m, which the company attributed to a change in its advertising strategy.

The Rightmove rival had reported a loss of £5.2m the previous year, when it wrote down the value of Yourkeys, a business it acquired in 2021 that helps developers manage their sales, by £19.5m.

Revenue had slipped by 7 per cent to £84.2m in 2024. Zoopla put the latest decline down to “lower programmatic and direct advertising revenue” as it moved towards promoting “more relevant property-related advertising” on its site.

The company does not disclose how many estate agents pay to list homes on its website but said its customer base “remained broadly stable” last year.

Paul Whitehead, chief executive of Zoopla, said: “Lots of marketplaces put what’s called programmatic advertising across their sites, but it’s generic.

“There’s some short-term revenue there, but is it the best consumer experience? Probably not. We want to work with [advertisers] that are contextual to the house move, whether that’s lenders or estate agents or credit score providers. It’s a tough decision because you lose some revenue as a result.”

Whitehead, 55, took charge as chief executive last year. He previously ran Cazoo, the used-car website that fell into administration in 2024.

Zoopla has been owned since 2018 by Silver Lake Partners, the American private equity firm that also holds a stake in City Football Group, the owner of Manchester City.

Rather than compete directly with the volume of leads Rightmove generates for its estate agent and developer customers, Whitehead wants Zoopla to offer fewer but better leads. Central to that approach is signing up more people to track the value of their current homes on the platform.

At the end of 2025 there were 5.4 million homeowners tracking their home’s value on Zoopla, a third more than a year earlier. The company says the figure has risen to 6.4 million so far in 2026.

“We believe [having a large number of homeowners using our platform] delivers great value to our partners who are getting more instructions,” Whitehead said.

“We can provide data insights even before people are in that actual moving window. You might start looking at particular types of properties or save a property, these are all signals to us that someone might be thinking about moving.”

He added that the new strategy was “starting to deliver in the numbers”. Alongside the return to profitability, Zoopla reported a 9 per cent increase in revenue in the first quarter of 2026.

Zoopla remains well behind Rightmove on earnings. In the first six months of 2026 alone, Rightmove generated a pre-tax profit of £149.1m on revenue of £225.8m, according to its half-year report, which also showed revenue up 7 per cent on the same period a year earlier.

Rightmove, which rejected a £5.6bn takeover approach from Rupert Murdoch’s REA Group in 2024, reported average revenue per advertiser of £1,726 a month in the first half of 2026. Zoopla does not disclose its monthly cost, which is thought to be as little as half of that.

“We’ll only increase prices if we’re delivering value, we won’t just do it for the sake of it,” Whitehead said. “Our competition is still very much focused on volume of leads, we’re more focused on intent and quality.”

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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The UK’s warmest summer on record has produced mixed results for businesses in south-west England and the Channel Islands, with some traders reporting higher visitor numbers and stronger demand for food and drink, while others say prolonged dry conditions cut output.

Provisional Met Office figures put the mean temperature for June, July and August at 16.5C (61.7F), the highest in a series stretching back to 1884. The Met Office said on 1 September that the figure was 1.9C above the 1991-2020 average and beat the previous record of 16.1C set in 2025, according to its summer 2026 statement. Rainfall over the three months was 195.4mm, 77 per cent of the seasonal average.

Meteorologists in Jersey and Guernsey confirmed both islands had their warmest summers on record, with average temperatures of 20.5C (68.9F) in Jersey and 18.9C (66.2F) in Guernsey.

The Avon Inn in Avonwick, Devon, reported a rise in trade after adding more outdoor seating. Manager Eda Iannone said the pub had seen “a fantastic summer for footfall”.

“We took a lot more bookings and we put a lot more outside events on with confidence, knowing that with the UK being weather dependent, they would go well,” she said.

Not every seasonal business gained from the heat. Christian Hocking, of ice cream seller Hocking’s in Appledore, Devon, said trade had been steady but customers were choosing water over ice cream because the heat suppressed appetite. “When it gets too hot, it does actually gets too hot for ice cream,” he said.

Separately, analysis by the thinktank Verdant put lost UK output from repeated heatwaves at £4.4bn by the end of July, citing reduced worker productivity and equipment shutdowns.

Guernsey Dairy said dry spells and high temperatures affected milk volumes from local farms, although supplies remained sufficient to meet daily demand across the island. Operations director Andrew Tabel said: “Our local dairy farmers and production teams have worked incredibly hard throughout this prolonged period of hot and dry weather.”

Rocquette Cider in Guernsey expects its apple harvest to be about 80 per cent lower than normal as a result of the hot weather. Manager James Miller described the outlook as “appalling”.

“The grass is very dry, we haven’t had to mow the grass at all,” Miller said. “The trees have been suffering, I think the only moisture they’ve been getting is from morning dew.”

He added: “Last year we had a good harvest, so we have a lot of cider stored which will carry us through, but two bad years would be devastating.”

The cider maker’s experience follows warnings from the Food and Drink Federation that drought will push up food prices into 2027, and a move by NatWest to offer repayment holidays to farming customers hit by reduced yields.

Tina Bessell of Cornish Lavender, based between St Agnes and Perranporth, said the heat produced a “fantastic” oil yield, although visitor numbers to the site fell on the hottest days. “The farm has loved the heat,” Bessell said. “I think I must be the only farmer in the South West that is happy with the heat.”

The National Trust for Jersey said extreme weather was affecting St Ouen’s Pond, where low water levels and algal growth are threatening a habitat used by migrating birds.

“Normally at this time of year we’d have all sorts of visitors like green sandpipers, curlews and we’ve had spoonbills visit us at this time of year before,” said Jon Parks of the trust. “They’re all looking for that wetland habitat, a chance to feed and there’s no water there, there isn’t that opportunity unfortunately.”

Parks said extreme summers were a “major contributing factor” to the problems at the pond, but stressed they were not the only cause.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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