The Financial Conduct Authority (FCA) has set out details of its polluter pay framework, outlining what firms should and should not do to tackle polluting behaviour and meet their redress liabilities. The FCA set our six main examples of polluting behaviour: basic phoenixing, where an authorised firm shuts down and a new firm emerges in its place; lifeboating, where a firm connected to an existing authorised firm is used as a method of preserving assets; fronting, where individuals with a clean regulatory history are presented as the managers of a firm in an authorisation application; restructuring, where the corporate structure is reworked to isolate liabilities and protect assets; when a firm sells its assets at below-market value; and when proceeds of a sale are not applied to redress.

Half (50%) of savers have never considered increasing their current workplace pension contributions, according to research for the Pensions and Lifetime Savings Association (PLSA). Almost three in ten people (28%) do not know the process to increase their pension contributions, with more men (55%) than women (39%) saying they understood how to change their contributions. Zoe Alexander, director policy and advocacy, PLSA, said: “This research underscores the gap between knowledge and action when it comes to pensions.”

New research indicates that the UK’s smallest businesses, particularly microbusinesses with fewer than 10 employees, are prioritising local growth over international expansion. A survey by Zempler Bank revealed that 27% of these businesses prefer regional development, while only 12% said their main goal was to expand internationally. While 54% of businesses expect modest growth, 24% have no ambition to grow. It is noted that while some small businesses could be hit by increases to statutory sick pay and parental pay, most will be shielded from changes to National Insurance contributions. Zempler Bank chief executive Rich Wagner said: “While sole traders and some microbusinesses are shielded from some of the upcoming tax changes, these changes will still hit smaller businesses hardest.” He added that smaller businesses “often don’t have the ability to absorb these additional costs or pass them on to customers in the way that larger firms can.”

The UK economy is facing increasing risks of stagflation, according to analysis by the ICAEW. The business confidence index fell by 14.2 points to 0.2, marking the lowest level since late 2022. This decline is largely attributed to tax increases, with 41% of accountants surveyed citing the tax burden as a significant concern, up from 29% previously. This marks the first time that tax has been identified as the biggest concern in the ICAEW survey since it was launched in 2004. Despite expectations of 0.2% growth in November, overall growth for Q4 2024 is anticipated to stagnate. Suren Thiru, economics director at ICAEW, said: “The economy is in a challenging period, with stagflation a live risk.” He added: “There is little in our key forward-looking indicators.. to suggest that a meaningful improvement is likely any time soon.”

Private equity fund managers are facing increasing pressure from investors to initiate deals after a prolonged period of inactivity. Adam Wedgwood, head of financial sponsor coverage at investment bank Cavendish, suggests that as the market shows signs of improvement, “so too will market confidence and PE will have a higher risk tolerance.” Meanwhile, John Taylor, a private equity partner at Herbert Smith Freehills, says assets snapped up by private equity houses during a post-pandemic deals boom in sales are now reaching maturity and investors are keen to see a return. Dealmaking increased 36% by value in the first nine months of 2024, with EY saying this was driven by buyers and sellers getting closer on valuation expectations and bullish sentiment.

Chancellor Rachel Reeves has pledged to go “further and faster” to improve economic growth, saying she is “under no illusion” about the scale of the challenge. This comes after government borrowing costs surged, with the yield on 30-year government bonds nearing a high not seen since 1998. Addressing the Commons, Ms Reeves said: “The economic headwinds that we face are a reminder that we should, indeed we must, go further and faster in our plan to kick-start economic growth that plunged under the last government.” It is understood that the Chancellor is planning to bring forward announcements from Labour’s promised industrial strategy. While she insisted that Labour is committed to its fiscal rules, Ms Reeves refused to rule out future spending cuts, saying she would not write “five years of Budgets in the first six months” in government.

UK inflation is set to have been steady in December, holding at the 2.5% recorded in November, according to a consensus of analysts compiled by Pantheon Macroeconomics. Rob Wood and Elliott Jordan-Doak, economists at Pantheon Macroeconomics, believe that inflation staying at 2.6% will only be “a temporary reprieve” for the economy. They expect price pressures to increase in the coming months, with Consumer Prices Index inflation forecast to reach 3.2% in April. Meanwhile, Deutsche Bank believes inflation will climb to 2.7% in December. Sanjay Raja, a senior economist at the bank, warns that “price momentum will only pick up from here,” with increases to employer National Insurance contributions and the National Living Wage set to push inflation higher.

A study has found that retirees face a higher risk of depression compared to those who continue working, but moderate alcohol consumption, such as an occasional glass of wine, might help lift their mood. Tracking 27,500 Americans aged over 50 for an average of 14 years, the study observed participants’ lifestyle habits and mood via biennial questionnaires. Retirees reported more symptoms of depression, including feeling sad or finding “everything is an effort,” compared to those who were still working or semi-retired. But those who drank in moderation – counted as two drinks or less in a day for men and one or less for women – were less likely to show signs of low mood than teetotallers.