Rachel Reeves is set to unveil a pensions shake-up that could unlock up to £80bn of investment in British infrastructure and business. The Chancellor plans to merge pension schemes in a move that could unlock a wave of private sector investment. Under the plans, 86 local authority pension schemes, which control assets worth almost £500bn, will be required to consolidate their assets in a “handful of megafunds.” These megafunds will need to meet rigorous standards, such as needing to be authorised by the Financial Conduct Authority, the Government said. Ministers will also legislate to create a minimum size for private sector defined benefit schemes. Ms Reeves says the “biggest set of reforms to the pensions market in decades” will “unlock tens of billions of pounds of investment in business and infrastructure, boost people’s savings in retirement and drive economic growth.” Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association, said: “Larger pension schemes can help achieve better outcomes for savers through economies of scale, stronger governance, negotiating power and additional resources.”

The potential for a trade deal between the UK and the US could jeopardise Sir Keir Starmer’s efforts to reset relations with the EU, according to John Alty, former permanent secretary at the Department for International Trade. Mr Alty said: “Whilst negotiations with the US do not inherently prevent us from improving the current trade deal with the EU, one could expect tensions to emerge.” He added that any reset with the EU would be limited while the UK remains outside the customs union and single market. The Prime Minister’s spokesperson affirmed the importance of the UK-US trade relationship, valued at £304bn, while maintaining that efforts to enhance ties with the EU would continue.

The Financial Conduct Authority (FCA) is considering giving lenders more time to respond to consumer complaints about motor finance commissions, a move which could delay potential compensation payouts. This follows a Court of Appeal ruling in October which said a broker could not lawfully receive commission from a lender without obtaining the customer’s fully informed consent. The City watchdog said an extension would “help prevent disorderly, inconsistent and inefficient outcomes for consumers making complaints, motor finance firms and the market.” The Finance and Leasing Association, the trade body for motor finance providers, described the FCA’s plan as a “sensible move.” Meanwhile, the FCA has said motor finance firms should ensure they have the resources to issue final responses to complaints, adding that lenders should also consider whether they need to make “financial provisions.”

Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), has announced that the watchdog’s contentious plan to publicly name companies under investigation will be “fundamentally reshaped” following significant industry backlash. The plan, which aims to enhance transparency and deter wrongdoing, has faced criticism for potentially leading to “naming and shaming” of firms, especially since most investigations conclude without further action. Mr Rathi, who was appearing before the House of Lord’s Financial Services Regulation Committee with FCA chair Ashley Alder, said the regulator will “absolutely not be announcing every investigation,” adding that “this is not a case of us opening up the entire book of investigations, that was never our intention.” The revised plans are set to give companies at least 10 days’ notice before disclosing they were being investigated, instead of just one day as initially proposed. Mr Rathi noted that the City watchdog plans to update the market on its plan “within the next week or so” and that its board will make a decision on the way forward in the first quarter of next year.

Analysts say banks may have to rein in share buybacks as the Financial Conduct Authority considers whether to expand a probe into discretionary commission arrangements between lenders and car dealers. They warn that with the regulator broadening the scope of a review into the now-banned car loan deals, it may increase the sector’s exposure to potential compensation costs. Gary Greenwood, an analyst at Shore Capital, said: “A wider scope, by implication, means potentially higher compensation costs.”

Retail bosses have told the Chancellor that they will be forced to increase prices and cut jobs due to tax hikes set out in last month’s Budget. In a letter co-ordinated by the British Retail Consortium (BRC), retail bosses warned that job losses were “inevitable” and higher prices are a “certainty.” Highlighting the “sheer scale of new costs” and the “speed with which they occur,” signatories said: “It will not be possible for businesses to absorb such a significant increase to their cost base over such a short timescale.” The BRC has estimated that an increase in employers’ National Insurance contributions and a lower wage threshold for the tax will see retailers’ tax burden jump by £2.3bn a year. While brokers at Peel Hunt estimate that retail firms will see pre-tax profit fall by an average of 7.5% as a result of the tax increase, analysts at Panmure Liberum say the tax hike combined with a minimum wage increase could knock 10% off retailers’ pre-tax profit. Meanwhile, more than 200 hospitality bosses have told the Chancellor of their “grave fears” about the impact on the sector, which they estimate will incur nearly £14bn of extra costs during this parliament, voicing concern in a letter orchestrated by lobby group UKHospitality.

The City of London is witnessing a significant shift in working patterns, particularly with the rise of hybrid working. According to the latest ONS data, 40% of the workforce is still working from home at least part of the week, with older, educated individuals being the most likely to adopt this model. However, a recent KPMG survey found that 83% of UK CEOs anticipate a full return to pre-pandemic working methods within three years. While some companies are enforcing a return to the office, the Government is introducing legislation to allow employees to request flexible working arrangements.

Bank of England policymaker Catherine Mann says she will “move big” on interest rate cuts when it is clear that pressures on inflation have been eliminated. Ms Mann, a member of the Bank’s Monetary Policy Committee (MPC), told the BNP Paribas Global Markets Conference that she voted to hold rates at the last meeting “because, in my view, there is outside risk to inflation, already embedded potentially going forward… and in that environment it is important to hold for longer.” She added: “And then, when I have evidence that there has been a removal or sufficient moderation of inflation persistence, then I will move at a bigger step.” She added that as part of her “activist strategy … when I move, I will move big.”