The Federation of Small Businesses (FSB) has urged the UK’s key regulators to help deliver economic growth, saying sector watchdogs must “put their shoulders to the wheel on growth alongside business and industry.” In letters to watchdogs including the Financial Conduct Authority, Financial Reporting Council, and Competition and Markets Authority, the FSB says it “wholeheartedly” agrees with the Prime Minister that “regulators have a duty to take a long hard look at current activities in their sphere for their impact on economic growth – to be ‘pro-growth’ and ‘pro-investment’ in their partnerships.” Tina McKenzie, policy chair at the FSB, said: “Regulators must grasp this opportunity to propose small business growth measures within their activities and remits. Regulating for growth doesn’t always mean deregulation – sometimes it means better protection for small firms as consumers.” The FSB’s correspondence comes after minsters wrote to a number of watchdogs in December, saying that regulators must support growth.

A survey by the British Chambers of Commerce shows that approximately 16% of British companies reduced hiring in the fourth quarter of last year, the highest level since early 2021. This marks an increase from the 13% recorded in Q3 and reflects growing concerns over rising costs, particularly due to upcoming tax hikes. Jane Gratton, the BCC’s deputy director of public policy, said: “Business confidence has been hit hard since the Budget,” adding that employers “are now having to plan for a significant increase in employment costs,” including higher National Insurance rates and a hike in the minimum wage.

Business leaders have warned ministers that enhanced rights for workers could put jobs at risk. Rupert Soames, chair of the Confederation of British Industry, has questioned plans to give workers rights including sick pay and protection from unfair dismissal from day one and the banning of zero-hour contracts, saying: “I think not only will they not employ (people), I think they will let people go. I think there could be quite an ugly rush before some of these things come into force.” Voicing concern over elements of the Employment Rights Bill, Mr Soames warned of becoming an “adventure playground for employment rights lawyers.”

Rupert Soames, chair of the Confederation of British Industry (CBI), says Rachel Reeves has created a “hole in the confidence and trust of business” by targeting the private sector as she looks to boost government finances, warning that the Chancellor “bruised” British companies by delivering £40bn of tax hikes in the Budget. Noting that the Chancellor said business was “going to have to fill” an “unexpected hole” of about £22bn in public finances, Mr Soames said: “I think sometimes it’s not understood, the extent of the impact, particularly on companies that employ lots of people.” He went on to warn that an increase in employers’ National Insurance contributions is “going to feed through into inflation,” weaken growth and have a negative impact on employment.

According to analysis by trade body Make UK and PwC, nearly 60% of senior executives in the manufacturing sector are planning to increase their investment, with optimism driven by a long-term industrial strategy. However, a third of executives remain cautious, fearing an economic downturn this year. Cara Haffey from PwC UK comments: “While it’s true that UK manufacturers are navigating a complex business landscape, compounded by rising costs, there’s a palpable sense of optimism and resilience underpinning the sector’s trajectory for 2025.” Make UK CEO Stephen Phipson said manufacturers “have demonstrated their resilience over and over again in recent years,” and has urged ministers to boost the sector. He said: “It is now vital that the Government sets out as a matter of urgency the immediate and significant priorities as part of its formal industrial strategy, given the very clear benefits manufacturers believe this will bring.”

Britain’s trade growth is likely to be hampered by Brexit, tariffs set to be introduced by president-elect Donald Trump and a decline in trade with China, according to a report from Boston Consulting Group. The Analysis says that UK trade will grow by 0.7% a year between 2023 and 2033, with this down from a previous estimate of 0.9%. This would see trade growth fall behind domestic GDP growth, which is expected to average 1.6% in the decade to 2033. Tim Figures, partner and associate director at BCG, said the new projections were “concerning for a global trading nation such as the UK.”

According to analysis by HSBC, the value of companies in Britain’s innovation and technology sector exceeded $1trn for the first time last year, reaching a combined enterprise value of $1.2trn. This is 20% higher than in 2023. The UK technology ecosystem remains the leader in Europe and ranks third globally, following the US and China. Notably, UK start-ups raised approximately £13.3bn last year, significantly outpacing Germany and France. The report highlights that enterprises focused on AI raised £3.4m in venture capital, accounting for a record 27% of all venture capital raised in 2024.

With government borrowing costs continuing to climb, Prime Minister Keir Starmer says the Treasury will be “ruthless” in cutting government spending and insists that ministers are determined to bring about economic stability. The Prime Minister also insisted that the Government will stick to the fiscal rules that Chancellor Rachel Reeves set out in October’s Budget. He said Labour “set out those fiscal rules very early on… because we knew that the missing ingredient in recent years has been economic stability.” While he said the Chancellor is “doing a fantastic job” and has the “full confidence of the entire party,” Sir Keir declined to answer when asked whether Ms Reeves would still be Chancellor by the next election. However, the PM’s official spokesman later said Ms Reeves will remain Chancellor “for the whole of this Parliament.”

Ryanair CEO Michael O’Leary is calling for European airports to impose a limit of two alcoholic drinks per passenger to combat drunken behaviour. O’Leary has urged Brussels to take action following similar requests made in the UK. His push comes after Ryanair filed a €15,000 (£12,600) claim against a passenger for disruptive behaviour on a flight from Dublin to Lanzarote in April 2024, which resulted in a diversion to Porto.