The UK has emerged as the second most attractive country for investment, surpassing Germany, China, and India, according to PwC’s annual CEO survey. This shift is seen as a “vote of confidence in the UK,” with 14% of global CEOs believing the UK will attract significant international investment, trailing only the US at 30%. Optimism among UK chief executives has increased, with 61% expecting economic growth in the next year, up from 39% in 2023. Despite concerns over rising debt and recent sluggish growth figures, over half of UK CEOs plan to expand their workforces. Marco Amitrano, senior partner at PwC UK, stressed the importance of maintaining a consistent government approach to business and investment, stating: “The UK’s relative stability at a time of instability should not be underestimated.” The survey included responses from 4,701 CEOs across 109 countries from October 1 to November 8, 2024.

Property bills for retail, hospitality, and leisure sectors are set to more than double due to upcoming business rates reforms, warns Colliers. The Government’s reduction of business rates relief from 75% to 40% starting in April will lead to significant increases in bills. John Webber, head of business rates at Colliers, said: “The Labour Government’s business rates policies will soon put even further pressure on the high street.” For instance, retailers’ average bills will jump from £3,751 to £9,003, while restaurants will see an increase from £5,563 to £13,351. The Treasury claims that the change will still protect one in three business properties from paying business rates.

Despite concerns over tariffs and trade wars, the majority of British business leaders remain optimistic about growth. A report by Capgemini reveals that 63% of UK business leaders plan to increase investment this year, with 60% optimistic about growth potential for 2025. However, 70% express worries about trade tariffs, prompting nearly 80% to de-risk their supply chains. Many businesses are investing in emerging markets to reduce reliance on China, with a focus on sustainability and technology, particularly in climate technologies and Gen AI.

A survey by the British Retail Consortium has revealed that 70% of CFOs from 52 major retailers are either “pessimistic” or “very pessimistic” about the upcoming year. In response to increased costs being imposed by the Government, notably those in employers’ National Insurance contributions, 67% of retailers plan to raise prices, while many will reduce staff hours and headcount. Helen Dickinson, Chief Executive at the BRC, said: “Retailers have worked hard to shield their customers from higher costs, but with slow market growth and margins already stretched thin, it is inevitable that consumers will bear some of the burden.”

The trend of working from home has surged, with the number of remote workers more than doubling from 4.7m in December 2019 to 9.9m by March 2022. Lord Rose, former boss of Marks & Spencer and Asda, asserts that the practice is creating a generation “not doing proper work”. The Tory peer told the BBC’s Panorama: “We have regressed in this country in terms of working practices, productivity and in terms of the country’s wellbeing, I think, by 20 years in the last four.” Major employers like Amazon and JP Morgan are now enforcing in-office attendance, while the UK Government is introducing changes to employment law to enhance workers’ rights to flexible working.

The Bank of England is considering establishing a “concierge service” aimed at assisting foreign financial services companies looking to enter the UK market. Sam Woods, head of the Bank’s Prudential Regulation Authority (PRA), indicated in a letter to the Prime Minister that they are exploring a proposal similar to Singapore’s one-stop-shop model for overseas firms. While the PRA aims to support growth, Woods reminded that its primary goal remains the safety and soundness of banks and insurers. “Financial instability can lead to severe disruptions to the ability of households and businesses to make transactions, manage risks, and access credit, amplifying economic shocks and hindering growth,” Woods wrote. Separately, the Chancellor told the FT she welcomed proposals from the Financial Conduct Authority to loosen mortgage rules and was “absolutely open to looking at ideas that can boost home ownership”.

Ashley Alder, chair of the Financial Conduct Authority (FCA), writes in City AM on the importance of regulation as a catalyst for growth in the financial services sector. He states: “The question we must ask is what is our collective tolerance for failure?” The FCA aims to enhance capital investment and liquidity while reducing regulatory burdens to foster business growth. Recent reforms, including changes to prospectus rules and public offer regimes, are designed to make the UK more attractive for listings. However, Alder acknowledges the inherent risks, such as potential increases in fraud from removing the £100 contactless payment limit. The FCA seeks a collaborative approach with government and parliament to support its growth mission, balancing risk and consumer protection.

The hospitality industry is facing an additional £1bn in costs due to changes in employer national insurance contributions, affecting 774,000 workers from April. UKHospitality, representing numerous businesses, has urged the Government to reconsider these tax changes introduced in Rachel Reeves’s budget. Chief Executive Kate Nicholls said: “The change to employer NICs is one of the most regressive tax changes ever,” highlighting the potential for job losses and increased prices. The industry, which currently employs 1.2m staff, is already grappling with £2.4bn in other costs. Business leaders warn that the cumulative effect of these changes could lead to significant job cuts and hinder investment.

The Government’s recent tax hikes are seen as a “major threat” to the labour market, according to Andrew Goodwin, chief UK economist at Oxford Economics. The increase in employers’ national insurance by £25bn and a 6.7% rise in the minimum wage could lead to significant job losses, particularly in sectors with low-paid employees. Goodwin warned that these changes might push up unemployment in 2025. However, Rob Wood from Pantheon Macroeconomics argued that the impact of the payroll-tax hike had been overblown pointing out that hiring intentions improved in December.

New analysis from Shawbrook reveals that nearly 6.1m accounts are set to breach the personal savings allowance due to frozen thresholds, an increase of 800,000 in just one year. Adam Thrower, head of savings at Shawbrook, warned that “many savers could encounter an unexpected pitfall that eats into their hard-earned interest.” The personal savings allowance, which allows savers to earn up to £1,000 in interest tax-free, is under threat as income tax thresholds remain frozen until 2028. This situation could push 2.5m people into the higher tax bracket by 2025-26, reducing their savings allowance significantly.

According to Hargreaves Lansdown’s savings and resilience barometer, financial resilience varies significantly across the UK. Wokingham, Elmbridge, and St Albans emerged as the most resilient areas, with 79% of households in the top 10 having sufficient cash left at the end of the month. In contrast, Hull, Nottingham, and Liverpool ranked lowest, with only 54% of households in the bottom 10 achieving the same. The report highlights that housing affordability plays a crucial role in financial stability, as high costs hinder property ownership.