Lord Sedwill, the former cabinet secretary, has endorsed calls to reduce regulatory red tape, asserting it hampers the UK economy. A report from the Policy Exchange think tank revealed that the headcounts of seven UK regulators surged by an average of 84% over the past decade. Sedwill stated that this increase in regulatory burden is “undermining innovation, productivity and delivery” in the UK. He acknowledged the necessity of regulation for citizen protection and market competitiveness but highlighted that the current system fosters a “risk-aversion ratchet,” leading to more regulations. The report also noted that some regulatory bodies expanded faster than the sectors they oversee, with the Financial Conduct Authority’s workforce growing by 10.7% compared to a mere 6.5% in financial services. The think tank suggested a 25% reduction in regulatory requirements and a register of regulations to better understand the economic impact.

The Federation of Small Businesses has called for government intervention to protect small businesses from the misuse of personal guarantees by banks. The group criticises the Financial Conduct Authority (FCA) for not investigating loans to limited company directors, stating that this oversight undermines the regulator’s efforts. Martin McTague, chairman of the FSB, said “the shadow of personal guarantees” discourages many small businesses from taking on debt, which hampers their growth. The federation previously submitted a “super-complaint” regarding harsh lending practices, urging the FCA to include personal guarantees in its consumer duty standards. While the FCA acknowledged the need for improvements in communication and loan policies, the FSB insists that more comprehensive action is necessary to support small business owners.

The Financial Conduct Authority has revealed that indications of potential insider trading have declined to a five-year low despite suspicious stock market moves occurring before 30% of UK takeover announcements last year. This is down from 35.3% in 2022. However, the regulator was using a new methodology to pinpoint illegal activity, namely including suspicious share-buying activity on the actual day that bid announcements are made. This has pushed the run rate of suspect cases from about 20% of takeovers to more than 30%. The FCA acknowledged that ignoring suspicious activity on the day of the bid announcement “potentially underestimated” cases of suspected insider dealing. Besides unusual share price movements, instances of abnormal trading volumes and larger-than-normal trades were down.

Businesses are facing a “paralysed” state following Rachel Reeves’s recent budget announcement, which has led to a significant slowdown in hiring. According to an index by Manpower Group, hiring intentions have stalled at 28% over the past three months, reflecting a similar trend observed after the COVID-19 pandemic. Michael Stull, managing director at ManpowerGroup UK, stated: “There is a strong appetite to grow but the new government’s actions have thrown the labour market into yet another period of uncertainty.” The budget outlined £40bn in tax increases, including a rise in employers’ national insurance contributions, which has contributed to a decline in business confidence and concerns about potential job losses among workers.

Holly Grant, a trainee accountant, has successfully won a discrimination case against her employer, Buffery & Co, after being accused of “skiving” due to her childcare responsibilities. Just a week into her apprenticeship, her manager, Katie Thompson, expressed doubts about her ability to succeed, stating that being a parent was a “barrier to success”. The tribunal found that Thompson’s comments reflected an unconscious bias against mothers, ruling that such remarks would not have been made to a male counterpart. Mrs Grant is now set to receive compensation, with the amount to be determined later.

Rishi Khosla, co-founder and CEO of OakNorth, has expressed concern that “wealth creators” are leaving the UK due to recent tax hikes. He asserted that the Government’s actions do not align with its narrative of promoting economic growth. The Chancellor, Rachel Reeves, has raised the maximum capital gains tax rate to 24%, prompting warnings from business leaders about the potential impact on the UK’s attractiveness for entrepreneurs. Khosla remarked: “I absolutely know that the change in approach to taxation for wealth creators is driving… wealth creators out of this country at a rate which, frankly, I have not seen before.” He also pointed out that the Government’s investment strategy favours large corporations over start-ups, which he believes are crucial for innovation and growth.

Richard Walker, the managing director of Iceland Foods, has voiced support for Chancellor Rachel Reeves’ business tax changes, urging companies to innovate rather than complain. He said: “Businesses that sit on their hands and complain will suffer,” pointing to the need for proactive measures in the face of rising employers’ national insurance.

Despite ongoing economic uncertainties, a survey by KPMG revealed that 92% of Britain’s small and medium-sized enterprises (SMEs) are optimistic about their growth in the coming year. Similarly, 89% of decision-makers from smaller businesses surveyed by Aviva expressed confidence heading into 2025. Euan West, head of KPMG’s private enterprise practice, said: “2024 has been a turbulent year, so it’s encouraging to see that private businesses are showing resilience.” However, challenges remain, with over a third of respondents concerned about the impact of increased national insurance contributions and the national minimum wage on profitability.

Rachel Reeves, the UK Chancellor, has called for a “closer” economic partnership with the EU, urging European finance ministers to ease post-Brexit trade barriers. At a recent meeting, she described the occasion as a “milestone moment” for resetting UK-EU relations. Reeves stated: “The truth is these unnecessary barriers to trade are one of the things that will contribute to the deterioration of living standards.” The Government aims to renegotiate the trade and co-operation agreement to eliminate checks on food exports, which have seen a £3bn drop since Brexit. However, the EU has its own demands, including a youth mobility scheme, which Reeves opposes, citing a need for domestic worker recruitment.

Bank of England deputy governor Dave Ramsden has warned that leverage used by hedge funds to build larger positions in UK government debt “could lead to system-wide risks” and needs careful monitoring. Ramsden, who is head of markets at the BoE and in charge of its balance sheet, was giving details of a new funding window for non-banks that the BoE plans to offer in periods of financial stress. He added that there had been no major bank failures or bouts of market dysfunction in 2024, even though political events had stoked volatility.