AGP Executive Report

UK Cost Pressure: Bank of England Governor Andrew Bailey says firms are absorbing high energy costs through thinner margins and cuts, as further tax rises loom. Cybersecurity: Hackers spent three weeks inside German dealer software used by hundreds of dealerships, stealing delivery dates, finance amounts and buyer details that could fuel payment scams. AI Adoption: Use of AI agents by EU small businesses is surging, but adoption still lags other markets; many firms also lack oversight of their AI use. SME Finance: Ireland has expanded its Growth and Sustainability Loan Scheme to €1 billion and extended it to 2029, while neobanks are growing small-business lending to fill a funding gap. Market Access: Italy is pitching itself as a gateway for Tunisian startups entering the EU, while Moldova is aligning national rules with EU law to create more opportunities for SMEs.

AI at Work: A European Commission survey found 42% of surveyed SMEs and mid-sized firms use AI or algorithmic management, but 49% do not trust automated systems to make decisions about staff. Energy Costs: UK small businesses face autumn bill shocks if they miss renewal deadlines or fall onto costly out-of-contract rates; unlike households, they have no price cap. Business Rates: More than 200 UK employers are urging Chancellor John Healey to overhaul the system, proposing a 2% levy on online sales to help fund rate cuts of up to 37% for businesses with physical premises. SME Finance: UK digital lenders are finding a profitable market as traditional bank lending to small firms shrinks. Some are eyeing overseas expansion to meet demand. Start-up Climate: The UK has slipped to 24th in a global ranking of places to start a business, with rising taxes and costs cited as concerns ahead of the Budget.

SME Rules: Moldova is moving to align its SME law with EU standards, raising turnover and asset limits so 147 more firms can qualify for support and finance. Export Opportunities: Nearly 2,000 Slovenian companies are expected at EXPO 2027 in Belgrade, following a cooperation deal with Slovenia’s craft and small-business chamber. UK Start-ups: Almost half of UK adults run a side hustle, and most want to grow; eBay and Small Business Britain say simpler paperwork and better access to finance could help turn them into lasting businesses. AI Adoption: European small firms are rapidly moving from AI chat to task-running agents, but affordability, skills and access remain uneven across the region. Hiring Costs: The CBI says raising the UK employer National Insurance threshold could create 41,000 jobs, especially for young and entry-level workers.

AI Adoption: Use of AI agents by EU small and medium-sized businesses rose more than eightfold between May and October, but founders still need the skills and safeguards to turn that uptake into lasting gains. Growth Funding: Helsinki-based Ambio raised €5.1 million to use AI to simplify sourcing recycled plastics, while Lyon accounting firm Dougs secured €50 million to expand its AI-supported services for small businesses. UK Budget Pressure: Nearly three-quarters of surveyed British scale-up founders have no confidence the coming Budget will support business, with taxes on capital and assets their main concern. SME Finance: Digital lenders are filling a gap left by traditional banks: UK challenger banks provided 60% of small-business lending in 2024, and some specialist lenders are already profitable. Energy Costs: Four in five small British businesses surveyed said hidden energy use is pushing up bills, including equipment left on overnight.

Banking: Kraken parent Payward has agreed to buy Lithuania’s Saldo Bank, a deal that could let it offer small-business loans and euro payments across several EU markets. The purchase still needs approval and is expected to close in 2027. AI: OpenAI says weekly use of its work and coding tools by EU small and medium businesses rose eightfold from May to October. Its sample defines these firms as having 200 or fewer users, so the figures are not a measure of all European businesses. Digital access: The University of Malaga has opened its supercomputer to local SMEs developing AI, giving smaller firms access to computing power they may struggle to afford. Cybersecurity: Recent attacks on French supermarket refrigeration systems show how hackers can cause physical losses. Small firms with connected equipment should check whether their insurance covers cyber-related damage. Self-employment: In Italy, freelancers can face a sharp second-year tax bill because payments cover both the previous year and an advance for the current one. High streets: Scottish Greens want a rates surcharge on large online retailers, arguing it could help independent businesses compete; the proposal has yet to become policy.

SME Technology: Málaga University is opening Picasso supercomputer access and AI advice to local SMEs, giving smaller firms a route to tools usually beyond their budgets. Self-Employment: Spain’s autónomos association is proposing two years without social security contributions for new business owners, with longer relief for some groups; the plan is not yet policy. Business Growth: North East firms on this year’s Fastest 50 list employ 6,803 people and generated combined turnover of £1.3bn. Wallsend’s Barrier Group topped the ranking, while Newton Aycliffe’s Media Den won the small-business category. Finance: Leeds brewery Amity Brew Co secured a second £150,000 investment from Finance Yorkshire to refurbish its taproom and add an all-day food offer. AI Adoption: AI use is surging among EU small and medium-sized businesses, with weekly users of ChatGPT’s work and coding tools up more than eightfold since May, though adoption remains uneven across countries.

Energy Costs: A UK survey found 80% of small firms worry about “phantom” energy use, with computers, printers and chargers often left plugged in after hours. AI Adoption: Two-thirds of AI-using small and mid-sized firms in a four-country survey have built tools of their own, but most do so without a formal review; adoption was lower in the UK and Germany than in Sweden. Market Concentration: New research argues that Europe’s small-business owners are squeezed by increasingly dominant large firms, eroding trust in institutions and pushing some towards the radical right. Local Retail: Murcia lost 21% of its traditional butchers and 27% of its fishmongers between 2014 and 2024, as supermarkets, rising costs and staffing pressures weigh on independents. Business Finance: Ireland has expanded its Growth and Sustainability Loan Scheme to €1 billion and extended it to 2029, offering a longer runway for firms seeking funding.

EU Packaging Rules: The Commission is urging a quick simplification of packaging rules after microbusinesses warned that appointing representatives in every country they sell to could cost thousands of euros. UK High Streets: Retail sales rose just 1.3% year-on-year in September, and retailers warn further tax or business-rate rises could squeeze investment and jobs ahead of the Budget. Hospitality: Scotland lost 62 pubs in the first nine months of 2026; the industry is calling for VAT relief as rising costs threaten more closures. Cross-Border Trade: Andy Burnham says a new EU deal could reduce paperwork and losses for food exporters, including Scottish salmon businesses facing checks on every shipment. Local Retail: Murcia lost more than 400 traditional butchers and fishmongers in a decade, with small operators hit by supermarket competition and rising rents, utilities and taxes. Business Finance: Ireland is expanding its Growth and Sustainability Loan Scheme to €1 billion and extending it to 2029, giving firms more time to access funding.

AI Adoption: European small businesses are building their own AI tools faster than they can oversee them, a new Pax8 survey found. Two-thirds of AI-engaged firms had AI solutions in regular use, while 35% reported unapproved AI in the past six months. Rising Costs: Transport workers in southern France staged a go-slow protest over diesel prices, warning that fuel costs threaten both small operators and major hauliers. Export Relief: Proposed UK-EU deals could cut paperwork and costs for food exporters, including small firms that currently pay up to £200 per export health certificate. Business Finance: Ireland expanded its Growth and Sustainability Loan Scheme to €1 billion and extended it to 2029, offering more time and funding for firms seeking to invest. Local Traders: A fire destroyed Paris’s historic Marché des Enfants Rouges and all 17 food stalls, dealing a severe blow to the small businesses based there. Defence Contracts: Smaller firms still face major hurdles entering government defence markets, despite calls to bring more SMEs and private investment into the sector.

Fuel Costs: Around 50 lorries blocked lanes at a toll in southern France, protesting diesel at €2.25 a litre. Drivers say rising costs threaten businesses from independent hauliers to couriers. SME Finance: Ireland has doubled its Growth and Sustainability Loan Scheme to €1 billion and extended it to June 2029. About 2,000 businesses have already borrowed through the programme. Security Risks: European intelligence agencies warn that small firms making drones and components for Ukraine may be targets of Russian plots, prompting companies to tighten security. Energy Relief: UK manufacturers can now apply for support covering up to 25% of power bills, plus a first-year payout. Red Tape: The European Commission is asking commercial fishers about ways to simplify reporting and administration.

Rural Digital Access: A new PEACEPLUS project will help small businesses and community groups across Northern Ireland’s border counties build digital skills and make better use of technology. Funding and Energy Costs: Northern Ireland’s small firms have secured £2.4 million through a loan fund, while UK manufacturers can apply for up to 25% off power bills and a first-year payout. Business Climate: EU firms still face uncertainty, and French companies are contending with rising absenteeism: nearly 5% of working time was lost in 2025. Start-up Potential: A UK study says people over 40 feel too old to launch a business, despite millions sitting on ideas valued at £391 billion. Security Risks: European intelligence agencies warn that defence suppliers to Ukraine, including smaller drone makers, may face heightened threats to their executives.

Startup Finance: West Midlands brothers Jaydon and Brendon Manders built sauce brand Lumberjaxe from £100 each in their mother’s kitchen, but struggled to secure bank support when a major Aldi order created a cash-flow crunch. Energy Costs: UK manufacturers can apply for up to 25% off power bills, plus a first-year payout — a timely break for firms facing high operating costs. Access to Credit: Northern Ireland’s Small Business Loan Fund has provided £2.4m to SMEs, while businesses across the UK are pressing for stronger late-payment protections to ease cash-flow strain. Workforce Pressures: Absenteeism in France’s private sector reached 4.95% in 2025, with average absences lengthening to 38 days, adding to employers’ staffing challenges. Business Potential: UK small firms generate £868bn in annual sales, while a new study suggests many over-40s are holding back business ideas because they feel too old to start.

UK Microbusinesses: Firms with fewer than 10 staff generate £868bn in annual turnover and support 3.8 million jobs, new research finds. Their backers say these businesses are overlooked in policymaking and want lower employment taxes and changes to business rates. Northern Ireland Finance: Fifty-seven SMEs have secured £2.4m through the Small Business Loan Fund since its launch last year, offering a source of finance beyond traditional lending. Energy Costs: UK manufacturers can apply for up to 25% off power bills, with an additional first-year payment — welcome relief for firms facing high operating costs. Tax and Compliance: Hungary’s proposed flat-tax reform would let small sole traders invoice companies again and lift the revenue ceiling to 22 million forints, but adds a 15% burden on business-to-business invoices. Spain’s delayed Verifactu invoicing rules are also set to affect SMEs and self-employed businesses. Cash Flow: SMEs are urging the UK government to strengthen late-payment protections, as delayed invoices continue to strain business finances.

UK Microbusinesses: Britain’s 3.3 million firms with fewer than 10 employees generate £868bn in annual sales and support 3.8 million jobs, yet a new report says they get scant attention from policymakers. It calls for lower employment taxes and business-rates reform. Energy Costs: Manufacturers can apply for a UK scheme offering eligible firms up to 25% off electricity bills from April 2027, plus a one-off payment for early applicants. EU Outlook: Europe’s SME climate index is steady, but the survey finds weak trading and investment prospects. Energy costs, uncertainty and falling short of sales expectations continue to weigh on firms, especially in manufacturing. Start-up Rules: Former Vodafone chief Vittorio Colao says Europe should simplify the first years of running a company and open more public contracts to small businesses, warning that fragmented rules hold young firms back. Northern Ireland Finance: Fifty-seven SMEs have secured £2.4m through the region’s Small Business Loan Fund III since its launch last year.

EU Business Climate: Europe’s SMEs remain in “fragile stability,” with weak orders and turnover, rising prices and uncertainty holding back investment. Manufacturing is still the hardest-hit sector. UK Energy Costs: Manufacturers can apply for a scheme offering up to 25% off electricity bills from April 2027, plus a first-year relief payment. Applications are due by November 30. Hospitality Pressure: Independent UK hotel owners warn a proposed tourist tax could add to high VAT and falling visitor numbers, making it harder to stay afloat. Simpler Rules: The European Commission is asking fishers and aquaculture businesses where reporting requirements create unnecessary costs and duplication, as it seeks to reduce red tape. Access to Finance: Northern Ireland’s small-business loan fund has provided £2.4m to 57 firms since launching last year. New Ventures: A UK study suggests millions of people over 40 are holding back business ideas because they fear they are too old or may fail; a new fund offers £50,000 in grants and coaching.

Cybersecurity: UK microbusinesses combining AI tools, freelancers and outsourced services risk fragmented systems and unclear accountability, Oneresource warns. Red Tape: The European Commission is asking fisheries and aquaculture businesses which reporting rules create needless work, as it pursues a 35% cut in administrative burdens for SMEs. Finance: Northern Ireland’s Small Business Loan Fund has provided £2.4m to 57 SMEs since launching last year. Work and costs: Ireland’s Small Firms Association says hybrid-work policies must suit small teams and sectors where staff need to be on site, as rising fuel and energy costs threaten jobs. New founders: A UK survey finds more than four million people aged over 40 have shelved business ideas; a new fund will offer £50,000 in grants and coaching to five entrepreneurs.