Corporate Britain is poised for a significant wave of takeovers in 2025, with a third of AIM companies identified as vulnerable to bids, according to Peel Hunt. The investment bank warns of “barbarians at the gate,” referencing the notorious RJR Nabisco takeover battle. The UK stock market has seen its largest net loss of firms since 2009, with 88 companies exiting and only 18 joining. Richard Wilson, CEO of Interactive Investor, highlighted the detrimental impact of the 0.5% stamp duty on London-listed shares, stating: “We are taxing the UK stock exchange out of existence.” Peel Hunt’s Michael Nicholson emphasised the need for boards to prepare for potential bids, adding: “Bid defence manuals are no longer an item to be left on the shelf.” The report indicates that AIM stocks are particularly at risk due to low liquidity and depressed valuations.

UK car manufacturing experienced its lowest output in November since 1980, with only 64,216 units produced, marking a 30.1% decline from the previous year. Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), said: “While a decline was to be expected given the extensive changes underway at many plants, manufacturing is under pressure at home and abroad.” The production of electric and hybrid vehicles also fell by 45.5%, totalling 19,165 units, which is nearly a third of the overall output. SMMT has urged the Government to reconsider the ‘ZEV mandate’ regulation, which could impose nearly £6bn in costs on carmakers.

The Financial Conduct Authority (FCA) has announced an extension for companies to respond to motor finance complaints until 4 December 2025, following a significant high court ruling. The FCA stated: “We have extended the time firms have to handle complaints to help prevent disorderly, inconsistent and inefficient outcomes for consumers and firms.” This decision comes after a review of historical discretionary commission arrangements (DCAs) and a landmark court case that highlighted the need for customer consent regarding commissions. Additionally, the FCA has extended the timeframe for consumers to refer non-DCA complaints to the Financial Ombudsman until 29 July 2026. The FCA plans to further outline its review of motor finance in May 2025.

The UK’s Financial Conduct Authority (FCA) has proposed a new, simplified investor information system to enhance investment clarity and participation. This initiative is part of the Labour Party’s efforts to reform regulations in the financial sector. Simon Walls, interim executive director of markets at the FCA, said: “High quality product information will give consumers the confidence to invest; increased participation in this market will not only benefit consumers but will also provide capital to drive the economy and boost growth.” The consultation period will conclude in March.

The UK Information Commissioner’s Office (ICO) has condemned Google’s decision to allow advertisers to track users through digital “fingerprints” from mid-February next year. Google had previously said using digital fingerprints “subverts user choice and is wrong” but has now reversed its position. Stephen Almond, the ICO’s executive director for regulatory risk, said: “We think this change is irresponsible. “Businesses do not have free rein to use fingerprinting as they please. Like all advertising technology, it must be lawfully and transparently deployed – and if it is not, the ICO will act.”

Lee Barron, the Labour MP for Corby and East Northamptonshire, has initiated a debate on enhancing employment protections for terminally ill workers, stating it is “the start of a conversation, not the end.” The discussion highlighted a “loophole” allowing some employers to dismiss employees with terminal illnesses. Despite Barron’s advocacy, a government minister from the Department of Business and Trade argued that the current flexible approach is sufficient. Barron, a supporter of the Dying to Work campaign, stressed that individuals with terminal diagnoses should not have to worry about employment tribunals, asserting that “our values are of compassion and fairness.”

In the 2022-23 financial year, 45.3% of non-retired Brits, approximately 25m people, were classified as net beneficiaries, receiving more from the state than they contributed in taxes. This figure has risen from under 32% at the start of the century. Including retirees, the total rises to 52.6%. The Office for National Statistics (ONS) report highlights concerns over public sector sustainability, especially as tax rates approach record highs following Labour’s Budget changes. The median household income before taxes and benefits was £37,300, which increased to £39,700 after accounting for these factors. The wealth gap is significant, with the richest fifth earning £114,300 compared to £9,800 for the poorest fifth. The report also notes a 4.7% decrease in median equivalised final income due to the cost of living crisis.

In a recent session with MPs on the Liaison Committee, Sir Keir Starmer contradicted previous claims made by Farming Minister Daniel Zeichner regarding inheritance tax changes affecting family farms. Zeichner had asserted that the reforms were aimed at wealthy individuals using agricultural land as a way of dodging tax, but Starmer said the Government’s intention was to simply raise revenue in the Budget, adding: “It wasn’t aimed at a particular group of individuals.” Following the session, Environment Committee chairman Alistair Carmichael asserted that the PM’s comments undermined the Government’s justification for the tax changes. “It was clear from his answers that it is just about raising money. He could not have been clearer that if farmers are caught and farms have to be sold then that is fine by him.”

The Financial Reporting Council found that some 57% of audits completed by Tier 2 and 3 auditors needed ‘significant improvements’, up from only a third last year. In its annual audit quality inspection reports of 27 audit firms, the regulator said: “It is concerning that such a high proportion of audits were assessed in the poorest quality category.” Only three of the audits inspected were classified as ‘good or limited improvements’, compared to five last year.

Hannah Bernard OBE, Co-Chair of the Invest in Women Taskforce, highlights the vital role of female angel investors in supporting women-led businesses. The taskforce has secured a £255m funding commitment from institutional investors to enhance the investment landscape for women. A recent report, Gaining Altitude: Female Angel Investors Across the Regions, reveals that increasing the number of female angel investors can significantly boost capital for female founders. However, challenges remain, such as low awareness of tax reliefs like the Enterprise Investment Scheme (EIS) and accessibility issues for smaller angel groups. The report calls for collaboration between angel groups and financial services to improve knowledge and support for diverse investment ecosystems.

Venture capital is thriving in AI investments, exemplified by Databricks’ $10bn funding, despite a significant decline in overall venture capital activity since 2021.

The Bank of England has decided to maintain interest rates at 4.75% following a split vote among its Monetary Policy Committee (MPC). While six members opted to keep rates unchanged, three advocated for a 0.25 percentage point cut due to concerns over stagnating economic growth. The MPC’s new projections indicate zero GDP growth for the last quarter of 2024, a downgrade from previous forecasts. The Bank said changes to employment costs in the Budget had created significant uncertainty in the economy. “Most indicators of UK near-term activity have declined,” the BoE explained. This means there would be a gradual approach to interest rate cuts next year, BoE Governor Andrew Bailey added.