According to research by Kroll, there were 1,330 administrations last year, a 6% increase on the year before and significantly higher than it was in the years following the pandemic. Manufacturing suffered the most with administrations up by a fifth followed by the construction sector. The sectors posting the biggest increases in administrations were recruitment, where they rose by 53%, and media and technology, with a jump of 50%. The total number of company administrations is expected to grow again this year as Labour’s tax hikes bite. Benjamin Wiles, head of UK restructuring at Kroll, said he expected the leisure, hospitality, retail and healthcare industries to be hardest hit by the increase in employers’ National Insurance contributions because of the large number of people they employ. Large corporates may be able to absorb the added costs, but SMEs will face a tougher time, Wiles added.

Over 10,000 millionaires left the UK in 2024, according to New World Wealth, with analysts attributing this to various factors, including rising taxes, the increasing influence of the US and Asia in the tech sector, and the declining significance of the London Stock Exchange. Andrew Amoils, head of research, noted that “wealthy non-doms have been targeted with additional taxes, which has prompted many of them to leave the country.” The report highlights that the UK has lost 16,500 millionaires from 2017 to 2023, with cities like Paris, Dubai, and Singapore emerging as popular destinations.

Labour’s tax policies appear to be negatively impacting consumer and business confidence. A recent survey by Deloitte revealed that consumer confidence stalled in the last quarter of 2022, with eight out of ten respondents anticipating price increases this year. Olivier Vernon-Harcourt, head of retail at Deloitte, said: “Consumer demand is likely to remain subdued while things settle in the first half of the year.”

The latest Lloyds Bank UK sector tracker reveals that the number of sectors experiencing output decline has reached a 15-month high, with 11 out of 14 sectors reporting contraction. This increase from eight sectors in November indicates intensifying cost pressures. Nikesh Sawjani, senior UK economist at Lloyds, noted that businesses “are taking decisions to reduce operating expenses in order to protect their margins.”

Retail sales fell by 0.3% in December, according to the Office for National Statistics (ONS). Food sales volumes fell by 1.9%, marking the lowest level since 2013, while non-food stores experienced a modest increase of 1.1%. The final quarter of the year also reflected a 0.8% decrease in sales volumes, indicating ongoing consumer confidence issues post-October Budget.

Labour is poised to introduce a ban on non-disclosure agreements (NDAs) used by UK employers to silence harassment claims, as part of the Employment Rights Bill overhaul. Employment rights Minister Justin Madders has indicated that amendments will be made in the coming months. Liberal Democrat MP Layla Moran previously proposed an amendment to void NDAs preventing disclosures about harassment, but it was rejected due to specific wording. A government spokesperson affirmed their commitment to workers’ rights, acknowledging concerns about NDA misuse to intimidate victims. The previous government had also attempted to address NDA misuse, particularly in harassment cases, following revelations of their misuse in the financial services sector.

Research from the Centre for Cities reveals that workers across Britain have faced stagnant or declining wages since 2008, raising concerns about living standards amid a weak economy. Andrew Carter, chief executive of Centre for Cities, said: “The stark nature of the findings shows an incremental approach is not going to be enough. Boldness, urgency and scale are crucial.” The report highlights that many regions, particularly Mansfield, have seen significant drops in real wages, with workers earning nearly 20% less than in 2008.

Several commentators call for Labour to cut taxes or risk crashing the economy. Liam Halligan says in the Sunday Telegraph that Sir Keir Starmer’s administration “has thwarted growth”, compounding the economic difficulties left behind by the Tories. He goes on to say that the UK state is far too big and expensive but Labour is further expanding it for ideological reasons, with the increase in taxation and government spending spooking bond markets. Elsewhere, Oliver Shah asserts in the Sunday Times that “ Labour is deluded if it thinks it can keep talking about growth while bringing in policies such as its proposed workers’ rights bill.” There are laudable missions, such as planning reforms, but the Chancellor needs to take action to jumpstart growth, namely through tax cuts and spending cuts – two things anathema to a Labour government. Finally, talking to the Sunday Express, Shadow Chancellor Mel Stride says he is horrified at what Labour have done to the economy since the election. “They’ve heaped taxes on to business – taxed the living daylights out of them, talked down the economy and they seem now to be slightly shocked and surprised the economy is in a very bad place.” He adds: “We’ve seen growth killed stone dead.”

Rachel Reeves is facing significant criticism over a new 0.5% stamp duty on UK share purchases, which is projected to generate £4.2bn for the Treasury in 2024-25. Alastair King, the new Lord Mayor of London, argues that this tax undermines British businesses and discourages investment. He said the tax puts UK investors at a disadvantage compared to their US counterparts. King urged the Chancellor to consider scrapping or reducing the stamp duty, particularly for smaller, high-risk businesses on the AIM market, suggesting that even a targeted cut could cost only £650m while significantly boosting investment. He also described tax breaks for ISAs as “bizarre,” arguing they favour foreign companies over UK businesses.

Labour has dismissed urgent requests from charities facing a £1.4bn tax burden due to increased employers’ national insurance contributions. Despite the NHS being exempt from this rise, charities providing essential services are left to bear the cost. Stephanie Peacock, Minister for Civil Society, said: “The bottom line is that we have been very clear that we want economic stability and the money does have to come from somewhere.” The National Council for Voluntary Organisations warns that this tax will force many charities to reduce staff and services, with organisations like Marie Curie and Age UK highlighting the severe impact on their operations. Shadow Culture Minister Saqib Bhatti described the situation as “dire,” stressing the urgent need for reconsideration of this policy.

Small businesses are crucial to the UK economy, yet they are facing significant challenges, particularly in accessing financing. The 2025 Small Business Index Annual Report by Intuit Quickbooks, developed with Professor Ufuk Akcigit, reveals that 27% of small businesses relied on credit cards for operations in 2024, with 33% charging over 25% of their monthly expenses. This trend highlights a deeper issue of restricted access to affordable traditional financing, as banks become more selective in lending. The report also discusses the ‘income gap’ affecting credit access, stating: “Banks with higher income gap scores provided more access to credit card financing.” To combat these challenges, small businesses are advised to develop comprehensive financial plans, embrace digital tools, and seek support from accountants to improve their financial health and access to credit.

PwC has initiated a round of job cuts, offering voluntary redundancy to over 100 middle-ranking employees as part of its strategy to address a slowdown in professional services. The firm, which employs 25,000 staff, is also delaying promotions for around 100 junior consultants for the second consecutive year. According to a source close to the firm, this decision aims to stagger promotions to avoid a large cohort being promoted simultaneously. Marco Amitrano, PwC’s chief, is implementing these measures in response to a sector-wide downturn, with consulting services contributing about a third of the firm’s revenues. As inflation pressures firms, many are reducing their consulting expenditures, leading to a significant decline in available work.

TDR Capital has agreed to acquire a majority stake in CorpAcq, a firm specialising in supporting British SMEs, in a deal valued at over £1bn. The acquisition comes less than six months after CorpAcq’s plans for a US listing were abandoned due to challenging market conditions. CorpAcq, founded in 2006 by Simon Orange, has a portfolio of over 40 companies and focuses on buy-and-build strategies, allowing SME founders to maintain management control while receiving long-term investment support.

Chancellor Rachel Reeves is facing severe criticism for her handling of the economy, with Shadow Chancellor Mel Stride claiming that her actions have led to a £12bn increase in borrowing costs. Stride said: “The Chancellor’s economic mess means our taxes are being wasted on more and more debt interest.” Concerns are growing that Labour’s tax hikes will exacerbate inflation and interest rates, impacting mortgages. Former Treasury officials and think tanks warn that without significant policy changes, the UK economy risks entering a debt crisis and recession. A Treasury spokesperson defended Reeves, asserting that the Government aims to boost economic growth and stability.

The International Monetary Fund (IMF) has upgraded its growth projection for the UK, forecasting a GDP increase of 1.6% in 2025, up from 1.5% predicted last October. Despite a weaker-than-expected growth of 0.9% last year, the IMF anticipates that the UK will outpace other major European economies, including Germany, France, and Italy, over the next two years. However, the Fund trimmed its estimate of how much Britain grew last year to 0.9%, from a previous estimate of 1.1% made three months ago.

According to Mental Health UK’s second annual Burnout Report, younger workers are increasingly affected by stress, with one in three aged 18-24 needing time off for mental health issues. This contrasts sharply with only one in ten workers aged 45 and above. Brian Dow, the charity’s chief executive, stated: “Our survey clearly reveals it is young people most at risk of high stress in the workplace.” The report highlights a significant decline in younger workers’ comfort in discussing stress with managers, dropping from 75% to 56%. Factors contributing to this stress include unpaid overtime and job security fears. Dow emphasised the need for employers to adapt their mental health support to meet the needs of a modern workforce, warning that failure to do so could lead to losing young talent. The survey involved 2,436 working adults across the UK.