Chancellor Rachel Reeves plans to tear up red tape for the City of London, saying that while tighter regulation was the right way to go following the financial crisis, it has “gone too far” and delivered “unintended consequences.” Warning that the UK “has been regulating for risk, but not regulating for growth,” the Chancellor suggested that the financial services sector is “the crown jewel” in the economy and will “play a central part” in Labour’s plans for economic growth. The Treasury says reforms designed to push competition across financial services will include sending “growth-focused remit letters” to regulators and overhauling the system for consumer compensation to give customers and firms “clearer expectations” about redress. It is noted that Ms Reeves has written to the Financial Conduct Authority, Prudential Regulation Committee, Financial Policy Committee and Payment Systems Regulator to push for a greater focus on growth. David Postings, chief executive of UK Finance said he “strongly welcomed” the reforms to boost growth. He added: “Key to this is the regulatory environment, with the new remit letters rightly stressing the importance of growth and competitiveness in regulators’ work.”

A High Court judge says collapsed investment firm London Capital & Finance (LCF) operated as a Ponzi scheme, highlighting that it frequently paid funds from new bondholders to borrowers, which subsequently returned these amounts to the firm. Mr Justice Miles, ruling in a case bought by LCF’s administrators, said former LCF executives “knowingly participated” in fraudulent conduct, deliberately creating a false impression of the company and misleading auditor PwC. LCF collapsed in 2019 after the Financial Conduct Authority intervened when the firm was shown to be marketing unregulated mini-bonds and misleading promises of returns.

A survey of 400 business founders by entrepreneurs community Helm shows that 59% plan to “hold off on hiring additional staff” due to the increase in employers’ National Insurance contributions set out in the Budget. It was also found that 16% of founders plan to reduce staff numbers due to the increase in costs. Andreas Adamides, chief executive of Helm, said: “After years of struggling with high inflation, tight margins, and a challenging economic environment, this increase in National Insurance could undo the hard work and progress made by scale-ups.” He added that hiking employers’ NICs to 15% is “a threat to our nascent recovery and should be reversed before it does major damage.”

Business leaders have warned the Chancellor that the decision to increase employers’ National Insurance contributions from 13.8% to 15% will mean prices will rise and jobs will be cut. Bosses have also warned of the impact of a reduction to the threshold at which employers start paying the tax. John Longworth, chair of the Independent Business Network, described the Budget as “anti-growth”, while Dr Roger Barker, director of policy at the Institute of Directors, said the increase in employer NICs takes “no account of whether a business is profitable or not.” Meanwhile, Rain Newton-Smith, chief executive of the Confederation of British Industry, warned: “Chief executives look at some of the measures in the budget and say this is going to make it harder to make the decisions to invest in the UK.”

Analysts expect UK markets to see an increase in merger and acquisition (M&A) activity as the Budget and US election result bring an end to a period of uncertainty. Office for National Statistics data revealed that uncertainty over the UK election pushed the number of M&A deals to a four-year low in June, while Peel Hunt said activity remained subdued in the run-up to the Government’s first Budget and the US election. With these both now in the books, Peel Hunt believes that “the stage is set for a sustained increase in UK M&A activity.” James Wild, head of M&A at RSM UK, said the “much-needed clarity for businesses” can “only be a positive for the deals market,” with falling interest rates also set to play a part in driving an upturn in activity.

According to a post-Budget survey by Barclays, 46% of UK business leaders are eager to resume previously paused investment plans, while 37% are more inclined to seek additional funding for business growth. Despite economic challenges, the Barclays Business Prosperity Index reveals that 61% of companies remain confident about the UK economic outlook. Additionally, 44% of firms plan to invest in staff training, while 35% will focus on research and development. However, concerns persist regarding the impact of increased National Insurance contributions and minimum wage rises on costs. Matt Hammerstein, Barclays UK Corporate Banking boss, said: “The economic environment remains challenging for those on tight margins, but there are signs of cautious optimism emerging.”

Bank of England governor Andrew Bailey says that the UK must “rebuild relations” with the EU while respecting the decision to break away from the bloc. Mr Bailey, who previously said Brexit had “led to a reduction in the openness of the UK economy,” added that the changed relationship with the EU has “weighed” on the economy. He said: “The impact on trade seems to be more in goods than services… But it underlines why we must be alert to and welcome opportunities to rebuild relations while respecting that very important decision of the British people.”

Bank of England rate-setter Catherine Mann says officials need to take a “more forceful” approach to setting policy amid increasing uncertainty in the global economy, warning that policymakers “might need to reconsider some of the fundamentals of how we believe monetary policy works.” Warning that greater instability in financial markets can “blur the signal” policymakers wish to convey through monetary policy, Ms Mann said: “In such a world, I believe monetary policy actions and communications must be more forceful to cut through the noise.”

New research from Russell Reynolds Associates’ Center for Leadership Insight reveals that only 21% of senior full-time roles leading to chief executive positions in the UK are held by women. Despite an increase in female representation on FTSE 100 boards, this growth is primarily in part-time, non-executive roles, with only 11% of FTSE 100 CEOs being women. Laura Sanderson, co-head of Europe, Middle East & India at Russell Reynolds Associates, emphasised the importance of fostering a skilled cohort of women leaders, saying: “Establishing a cohort of skilled women leaders needs to be treated as a business imperative as it supports all aspects of a firm’s performance.” The study highlights that while female representation in boardrooms has risen from 12% in 2010 to 42% now, only 12 FTSE 100 companies have achieved gender parity in their senior leadership teams.