According to a survey by the Bank of England, over half of UK firms anticipate raising prices due to Labour’s recent National Insurance hike. Specifically, 54% of firms expect to increase prices, while 38% plan to reduce employee wages and 54% foresee a decrease in employment levels. Chancellor Rachel Reeves’ Budget raised the employers’ NICs rate to 15% and lowered the payment threshold. Michael Saunders, a former member of the Bank’s interest rate-setting Monetary Policy Committee (MPC), said that however the effects of the tax hike are spread, the result is the policy is reducing real activity. He predicts a cut to interest rates to boost a flagging economy early next year. Meanwhile, the British Chambers of Commerce (BCC) has revised its growth forecast for the UK economy from 1.1% to 0.8%, attributing this downturn to the Chancellor’s tax raids. Vicky Pryce from the BCC stated that businesses are “licking their wounds as the fallout from the tough autumn Budget continues.”

Activity in Britain’s housebuilding sector has continued to decline, primarily due to high borrowing costs and weak consumer confidence. The S&P Global/CIPS UK Purchasing Managers’ Index for construction rose slightly to 55.2, but residential housebuilding faced its steepest decline since June. Tim Moore, economics director at S&P Global Market Intelligence, noted that “the high cost of borrowing continued to hit new orders.” While commercial construction saw robust growth, overall confidence in the sector is at its lowest since October 2023. Concerns over rising employment costs and national insurance contributions announced by Rachel Reeves are further dampening optimism.

Writing in the Independent, Stewart Wingate, chief executive of Gatwick Airport, says the airport is ready to play a leading role in growing the economy. He says a proposal to operationalise its Northern Runway as a second permanent runway – £2.2bn privately financed project – could create 14,000 jobs and generate an additional £1bn annually in economic benefits. Wingate urges the Government to green light the move arguing Gatwick’s plans “align strongly with the Government’s growth agenda.”

Figures from HMRC reveal that an additional 100,000 workers have been dragged into a ‘60% tax trap’ in the past year. The tax trap applies when the personal allowance, which is £12,570 for the 2024/25 tax year, begins to fall because the worker earns £100,000. Mark Incledon, chief executive of wealth manager Bowmore Financial Planning, which obtained the figures, said: “It’s very surprising the Government chose to not address this in the latest Budget – the effective tax rate for those earning £100k-125k is known by Treasury officials but they’ve chosen not to address it. Rather than trying to fix the problem, the Government has allowed it to get bigger.”

Analysts at ING have warned that Chancellor Rachel Reeves will likely need to implement further tax rises during this parliament, despite her previous assurances against additional hikes. In their outlook for 2025, they stated that Reeves’ October Budget is “likely just the beginning” of a series of Budgets marked by tax increases.

According to a recent report by Deloitte, 40% of individuals with disabilities and chronic health conditions have experienced bullying and harassment at work. The study highlights that 23% of respondents felt their competence was questioned, while 24% were overlooked for promotions. In the UK, only about 50% of disabled individuals are employed, compared to 81% of non-disabled individuals. Louise Rubin from Scope stated: “Employers are missing out on a massive pool of talent,” emphasising the need for businesses to adopt inclusive practices. ActionAble 2025, led by Sara Weller, advocates for actionable steps towards diversity, urging firms to report on disability inclusion goals. Jackie Henry from Deloitte stressed the importance of addressing barriers to foster a supportive work environment.

Despite concerns surrounding the UK’s start-up ecosystem, Ashish Patel, managing director at Houlihan Lokey’s Capital Market Group, asserts that international investment is on the rise. He highlights significant funding successes, such as Wayve’s $1bn raise for self-driving cars and Monzo’s $430m funding round. Patel states: “Following the global investment declines of 2022, investment in UK-based businesses is picking up.” The British Venture Capital Association’s 2023 report reveals that US investors contribute 33.8% of capital to UK start-ups, with increasing interest from the Middle East. However, Michael Moore, BVCA chief executive, warns that UK investors may be missing out on returns, as only 40% of capital raised comes from domestic sources. He stresses the need for pension reforms to channel more domestic funding into venture capital, stating: “The lack of capital at the later funding stages is something we need to fix.”

US President-elect Donald Trump’s strong support for cryptocurrency starkly contrasts with the cautious approach of UK authorities, writes Patrick Hosking in the Times. The Financial Conduct Authority (FCA) warns investors to be prepared to lose all their money in digital currencies and has outlined a roadmap that permits authorised exchanges to trade crypto only for professional investors by 2026. Mike Ringer from CMS described this timeline as “incredibly disappointing for the industry,” noting that the Treasury’s plans for stablecoin legislation have also been delayed until 2026. Meanwhile, Trump’s appointment of Paul Atkins as head of the Securities & Exchange Commission has sparked speculation about potential regulatory changes in the US, pushing the UK further into the rearview mirror when it comes to crypto regulation.

The Prime Minister has unveiled a new blueprint for his Labour Government as the economy struggles following the Chancellor’s crippling Budget. Sir Keir Starmer made promises on energy supply, house building and NHS waiting lists as well as plotting targets for public sector reform. But key election pledges were watered down, namely a promise to secure the highest economic growth in the G7 – this has now become an “aim – and securing clean energy by 2030. In the PM’s the Plan For Change, this promise has now become “putting us on track to at least 95% clean power by 2030” Sir Keir also announced a new promise: to increase GDP per person and real household disposable income before the next general election – something every parliament since the WWII has achieved. Tom Waters, of the Institute for Fiscal Studies, said: “A target of merely having incomes higher after five years than they are now is very unambitious.”

The October Budget is set to negatively impact the UK’s prime property market, with a forecasted decline of 4% in the value of prime central London homes. According to Savills, changes in stamp duty for second homes, VAT on school fees, and non-dom reforms introduced by Chancellor Rachel Reeves will hinder the upper end of London’s property market. Lucian Cook, Savills’ head of residential research, stated: “In a normal housing market recovery, you would expect the top-end of the market to recover first.” However, the new tax measures are expected to dampen demand, particularly for homes valued over £4.5m. While the mainstream property market is anticipated to grow by 4% next year, the prime market is expected to lag, with predictions of a 9.8% growth in the next five years.