The UK economy experienced a modest growth of 0.1% in November, falling short of the anticipated 0.2% increase, as reported by the Office for National Statistics (ONS). Liz McKeown, director of economic statistics at the ONS, said: “The economy continues to be broadly flat, having grown slightly in November following two small falls in the previous months.” The services sector contributed to this growth, while industrial production saw a decline of 0.4%. Despite the slight recovery, the economy has only expanded in two of the last six months, raising concerns about the Government’s economic strategy under Chancellor Rachel Reeves. Business confidence has also waned, particularly after the recent national insurance hike, leading to a challenging outlook for the UK economy.

Alan Taylor, a member of the Bank of England’s monetary policy committee (MPC), has advocated for an immediate interest rate cut, stating that the UK is “in the last half mile on inflation.” Despite a slight decrease in the consumer prices index (CPI) inflation to 2.5% in December, it remains above the Bank’s target of 2%. During the MPC’s December meeting, rates were held at 4.75%, although Taylor, along with two other members, previously voted for a 0.25 percentage point reduction. In a speech at the University of Leeds, he stressed the need for a pre-emptive cut to mitigate potential cashflow challenges for businesses and households, asserting: “It’s time to get interest rates back towards normal to sustain a soft landing.”

With the Digital Operations Resilience Act (DORA) coming into force today, UK businesses are grappling with rising costs associated with compliance. Tim Wright, a technology lawyer at Fladgate, noted: “Judging from the activity we are seeing, many financial institutions are not fully prepared for DORA implementation.” Nearly 43% of financial services are predicted to miss the deadline, with many firms spending over €1m (£842,000) on compliance efforts. The pressure is particularly intense for smaller firms, which face resource constraints and complex requirements. James Hughes from Rubrik stressed the need for understanding critical data and mitigating risks, warning that failure to comply could lead to fines from the Financial Conduct Authority (FCA).

According to Savills, the commercial property market is expected to thrive this year, driven by factors such as cheaper financing, the sustainability agenda, and a return to office work. Despite ongoing challenges, the firm stated that “most markets are in recovery.” However, geopolitical uncertainties and high interest rates have led to a “somewhat shallower than expected” turnaround. Savills anticipates that the demand for sustainable buildings will continue to rise, with half of London offices potentially becoming “unlettable” by 2027 due to stricter environmental standards. The vacancy rate for central London offices has decreased to 8.8%, the lowest in over three years, indicating a positive trend in office space uptake.

The Institute and Faculty of Actuaries (IFoA) has released a report warning that global economic growth could decline by 50% between 2070 and 2090 due to the severe impacts of climate change. Sandy Trust, the lead author, said: “There is no realistic plan in place to avoid this scenario.” The report, titled Planetary Solvency – finding our balance with nature, criticises current economic theories that overlook the risks posed by nature degradation. It highlights that without urgent action to decarbonise and restore ecosystems, the world faces catastrophic consequences, including potential state failures and mass migration.

A survey by recruitment firm Reed suggests the much-heralded four-day working week is an “impossible dream” for British workers, with many reporting that their workload is pushing them closer to working six days a week. Ian Nicholas, global managing director at Reed, suggested that the extra hours could be workers’ attempts to demonstrate their value to avoid redundancy amid business cutbacks, or simply striving to keep operations running while companies struggle financially. The survey of 5,000 adults  indicated that fewer than a third of those working beyond their contracted hours were in receipt of overtime pay.

HMRC’s digital services are failing to meet the needs of taxpayers, particularly those with complex issues, according to Robert Salter, a director at Blick Rothenberg. The shift to online services has led to significant problems, with Salter stating that the agency’s chatbots connect only 49% of the time, and the resolution rate is a mere 21%. The ‘Making Tax Digital’ initiative, launched in 2016, has gone £1bn over budget with little improvement in service quality. A joint report by the Institute of Chartered Accountants in England and Wales and the Chartered Institute of Taxation highlighted these inadequacies. Salter asserted that “traditional communication methods must be maintained and improved” to assist those with complex tax affairs.

The UK’s Financial Conduct Authority (FCA) has become embroiled in a contentious activist campaign targeting seven investment trusts, driven by concerns for retail investors’ interests. The FCA has reached out to major retail investment platforms, including Hargreaves Lansdown and AJ Bell, regarding their communication with shareholders about upcoming votes on board memberships. Activist investor Boaz Weinstein, leading Saba Capital, is pushing for a vote to replace the boards, citing poor performance accountability. With stakes between 19% and 29%, Saba aims to secure 50% of votes to succeed. Richard Stone, chief executive of the Association of Investment Companies, stressed the need for proactive communication, stating: “With so much at stake, the regulator can’t just rely on people doing the right thing.” The FCA, however, views the voting rules as internal matters governed by the Companies Act.

The People’s Pension, a leading independent master trust in the UK, is set to enhance its investment strategy by allocating £4bn to private markets by 2030. This initiative, which will focus on sectors such as infrastructure and real estate, aims to benefit over 6.8m pension savers while potentially boosting the UK economy. The move has been welcomed by the Chancellor, who stressed the importance of growing the economy and improving living standards across the UK.