The latest Labour Market Tracker from the Recruitment and Employment Confederation shows the number of advertised jobs in the UK fell to pre-pandemic levels in December 2024. Active job postings dropped to 1.41m, a 5.5% decrease from November and return to December 2019 levels. New job postings also saw a significant decline of 16.8%, totaling 550,000, largely due to the seasonal Christmas slowdown. The Recruitment and Employment Confederation singled out new job postings for IT and some accounting-related occupations as having fallen dramatically in 2024, compared with the previous year.

The Office for Budget Responsibility (OBR) predicts that a freeze on tax thresholds means that the number of taxpayers liable for the higher rate will climb by 2.5m in 2025/26. The analysis shows that 7m people will pay 40% tax, with this 55% more than if income tax thresholds had never been frozen. While 3.5m workers will start paying income tax because of the freeze that began in 2021, 2.5m will be lifted into the higher tax band which applies to earnings over £50,270. Around 400,000 will be dragged the additional-rate threshold, paying 45% on earnings above £125,140. Sarah Coles of Hargreaves Lansdown said: “Gone are the days when being a higher-rate taxpayer was the preserve of the very wealthy – now around a fifth of taxpayers pay higher or additional rates.”

Investors have urged the Government to consider tax increases to maintain bond market credibility amid rising borrowing costs and fiscal challenges, despite the Chancellor’s resistance to further tax hikes.

Data from the Office for National Statistics (ONS) shows that inflation fell to 2.5% in December, marking a slight fall from the 2.6% recorded in November. While December’s rate remains above the Bank of England’s 2% target, it came in below the 2.6% that had been forecast by analysts. December’s fall in inflation will ease pressure on Chancellor Rachel Reeves amid a fall in the value of the pound and an increase in government borrowing costs. Suren Thiru, economics director for the ICAEW, said the surprise decline “provides some timely respite amid the financial markets turmoil.” Ruth Gregory, deputy chief UK economist at Capital Economics, said the inflation figure “strengthens the case” for the Bank to cut interest rates to 4.5% in February. Looking ahead, the EY Item Club expects inflation to average nearly 3% in 2025.

The Government’s borrowing costs have fallen after an unexpected drop in inflation in the UK and the US increased the likelihood that lower interest rates are on the horizon. The yield charged on key government debt fell below 4.8% on the back of the inflation data, having last week soared to the highest level in 16 years. Analysts said UK inflation falling to 2.5% in December would give the Bank of England greater room to deliver lower rates. Susannah Streeter, head of money and markets at Hargreaves Lansdown, warned that borrowing costs remain high, despite easing somewhat. She said that while costs have begun to edge downwards, they remain at “multi-decade highs as investors assess Britain’s debt burden.”

Sir Keir Starmer has expressed his commitment to enhancing trade relations with the US following Donald Trump’s return to the White House. During a recent Cabinet meeting, the Prime Minister outlined his goal of establishing a “partnership” with America to “advance our economic growth.” The prospect of a US-UK trade deal has been reignited, especially after negotiations stalled under Joe Biden. Lord Mandelson, the newly appointed US ambassador, supports a technology-focused agreement, saying that “there’s enormous scope here for us to align and to deepen the industrial economic trade partnerships.” As officials explore the potential for renewed trade talks, Labour ministers remain cautious about Trump’s tariff threats, which could significantly impact the UK economy.

ICAEW chief executive Alan Vallance looks at the impact of the collapse of outsourcer Carillion, detailing how it triggered calls for reform of audit and corporate governance. He says that while there have been consultations and reviews, “what we haven’t seen is legislation.” Mr Vallance says he is hopeful that Business Secretary Jonathan Reynolds “will be the person to finally make the change” after the Government included audit and corporate governance reform in the King’s Speech in July. Reflecting on the sector’s response to the issues, he says the profession “did not sit still,” noting that audit quality has improved and that firms have separated the operations of their audit and non-audit practices. The Financial Reporting Council, he adds, has acknowledged these voluntary improvements. Mr Vallance says that while the audit sector is doing well, “finally creating a strong corporate ecosystem which injects trust into the economy will mean it can thrive.”

The world economy is experiencing unprecedented division, according to the World Economic Forum’s Global Risks Report. The survey of over 900 risk managers found that 23% view armed conflict as the primary threat to global stability. Mirek Dusek, managing director at the WEF, said: “Rising geopolitical tensions, a fracturing of global trust and the climate crisis are straining the global system like never before.” Extreme weather events caused by climate change were identified as the biggest risk by 14% of respondents, while 8% said that geo-economic confrontation – such as steeper trade barriers – would constrain the economy. Just 1% of those polled of respondents identified a new global pandemic as the greatest threat.

Analysis by Zensai has unveiled Britain’s top 100 companies to work for, based on employee reviews on Glassdoor. Octopus Energy emerged as the best workplace with a score of 87.16. Bain & Company followed closely in second place with a score of 85.92. Rasmus Holst, CEO of Zensai, remarked: “It’s inspiring to see organisations like Octopus Energy and Bain & Company leading the way in fostering positive work environments.”