Nikhil Rathi, chief executive of Financial Conduct Authority (FCA), says City firms should expect a “different relationship” with the City watchdog. Highlighting that the FCA is being forced to “rigorously” reshape its approach to company failures as the Government pushes regulators to help deliver growth, he said the watchdog cannot “go after every technical breach of every rule.” He added: “We don’t think firms should expect from us lots of detailed rules to try and pin down every possible scenario.” Mr Rathi says there will be a “different relationship between the regulator and the regulated,” noting that the FCA is “shifting the way we regulate” and intends to “show quite a bit of flexibility.”

Pay growth in the UK was up 6.1% year-on-year in December, according to a wage tracker from Indeed, outpacing the rates seen in the US (3.1%) and the eurozone (4.1%). This came despite a “cooling” labour market, Indeed noted. Official data recently published by the Office for National Statistics shows that regular pay growth averaged 5.6% in the three months to November. Analysts at Goldman Sachs say that pay growth is set to “significantly exceed” the Bank of England’s projection for Q4,” while Rob Wood, chief UK economist at Pantheon Macroeconomics, believes that pay growth “is likely to remain strong in the near term.”

The Institute for the Future of Work (IFOW) has warned that without government intervention, the automation of jobs could exacerbate inequality in the UK. The report highlights the need for ministers to support small businesses and workers facing job changes, noting that “a pervasive sense of anxiety, fear and uncertainty” exists among employees regarding AI’s impact. Christopher Pissarides, the report’s main author and Nobel laureate, emphasises the importance of leveraging AI for productivity while alleviating stress on workers. Recommendations include establishing regional science centres to foster innovation and devolving decision-making to local areas.

The majority of UK firms will cut the size of pay awards in response to coming tax hikes. Analysis from Incomes Data Research shows that 69% of employers are extremely or moderately likely to reduce pay awards to offset an increase in wage-related taxes announced in the Budget, with more than half of these “extremely likely” to ease back pay increases.

According to data from a Freedom of Information request, HMRC refunded £8.3bn in overpaid tax during the 2022/23 tax year, benefiting around 8m workers. Each individual received an average of £943, although amounts varied. The overpayments were primarily due to incorrect tax codes. Recent research from Canada Life revealed that almost a third of UK adults who had checked their tax code have found that they had been in the wrong category at some point.

Restrictions on final salary pension fund surpluses are set to be eased, making more money available for investment as the Government looks to promote economic growth. The Treasury has announced that employees and trustees of well-funded schemes will be allowed to make deals on “surplus extraction,” unlocking cash for investment. The Prime Minister and Chancellor say changes to pension rules will allow surpluses currently ‘trapped’ in funds to be invested in the wider economy. The Government calculates that while around 75% of final salary schemes are currently in surplus – with this worth around £160bn – restrictions mean it has been hard for businesses to utilise this for investment. Officials say that giving more flexibility over how schemes are managed will help “remove blockages” that hinder the Government’s growth agenda. Rachel Vahey, head of public policy at AJ Bell, comments: “The Government, desperate to boost UK growth, has long had plans to tap into pension funds as a potential source of new UK investment.”

The National Audit Office (NAO) has warned that the threat of cyber-attacks against government departments is “severe and advancing quickly.” An assessment of 58 critical IT systems revealed “significant gaps in cyber resilience,” with concerns over at least 228 outdated systems. The NAO’s report indicates that the Government is on track to fail in its goal of significantly enhancing its cyber defences by 2025, with Gareth Davies, head of the NAO, saying: “The risk of cyber-attack is severe, and attacks on key public services are likely to happen regularly.” This comes after GCHQ’s National Cyber Security Centre recently warned of “a widening gap” between increasingly complex threats and the UK’s capability to defend critical national infrastructure.

UK-listed companies reduced dividend payments while increasing share buybacks in 2024, with the £86.5bn handed out in dividends marking a 0.4% decline on the previous year’s total.

Analysis by Public Desire reveals that the UK leads the world in online shopping, with Britons spending 8.8% of their annual income on e-commerce, the highest percentage globally. This outpaces countries including the US (4.3%), France (4.3%), and the Netherlands (4%). While US salaries are higher, Britons spend a greater proportion of their income online. Only South Korea (8.5%) and Taiwan (6.1%) come close to matching the UK’s online shopping habits.