Labour’s claim that new rights for workers will boost the economy because “a secure workforce is a more confident, more productive workforce” does not hold up to scrutiny, the Sunday Telegraph reports. Employers and even a Whitehall report show a negligible link between employment rights and growth. A study by the Regulatory Policy Committee concluded that the evidence presented to back the controversial Employment Rights Bill was “not fit for purpose” in multiple areas and that new protections would likely lead to reduced demand for labour. Neil Carberry, the chief executive of the Recruitment and Employment Confederation, points out that “more secure” working environments would mean fewer vacancies as less people moved jobs, reducing mobility and economic dynamism. With the Employment Rights Bill being imposed alongside a £25bn tax raid on employers and a higher minimum wage, which has already reduced vacancies, improved benefits in work are unlikely to be much help to the economy.

The UK Government is set to implement significant reforms to the welfare system, particularly affecting long-term sick individuals. Work and pensions secretary Liz Kendall stated that the current system is “broken” and needs to change to encourage people back to work while managing the rising welfare costs. The proposed changes may lead to reduced sickness benefit payments for hundreds of thousands, especially those with mental health conditions, who will face stricter eligibility criteria. The Government aims to introduce a “duty to engage” with employment services, helping claimants prepare for work. With the welfare bill exceeding £65bn, the reforms are seen as essential to prevent an emergency tax-raising budget. Discussions with disability groups are ongoing, but the changes are likely to provoke backlash from Labour and campaigners.

Chris Philp, the shadow home secretary, has stressed the need for Brits to enhance their work ethic to compete with global rivals like China and India. Despite a slight decrease in economic inactivity, 9.3m people remain out of work, with many citing long-term illness or education as reasons. Speaking on BBC Radio 4’s Political Thinking podcast, Philp advocated for a cultural shift towards greater effort. But Labour hit out at the comments while TUC general secretary Paul Nowak argued that the issue lies not in work ethic but in inadequate pay, urging support for workers’ rights and wages.

Yvette Cooper, the Home Secretary, has expressed concerns over Donald Trump’s tariffs on China, Mexico, and Canada, stating they could have a “really damaging impact” on the global economy. During an interview on BBC’s Sunday with Laura Kuenssberg, she stressed the importance of reducing trade barriers, saying: “We want to reduce the barriers to trade, make it easier for businesses.” Meanwhile, Andrew Griffith, the Conservative shadow business secretary, suggested that the UK could negotiate a trade deal with the Trump administration to avoid tariffs, highlighting a “big opportunity” for a US trade deal post-Brexit. In response to Trump’s actions, Canada and Mexico have vowed retaliation, with Canada planning to impose 25% tariffs on C$155bn of US goods. China too has said it will “take necessary countermeasures to defend its rights and interests” after Trump hit Beijing with new 10% tariffs.

Business confidence in the UK remains “historically depressed,” with the Institute of Director’s (IoD) economic confidence index at -59 in January, slightly up from -61 in December. “Confidence remains close to its Covid lows,” Anna Leach, chief economist at the IoD said. “It is clear that companies continue to be challenged by the breadth and scale of cost increases announced at the Budget, and this risks undermining both the investment needed to drive growth and the sustainability of the public finances,” she said.

Ministers are being urged to provide tax breaks to encourage entrepreneurs to list their firms in the UK. John Farrugia, co-chief executive of City broker Cavendish, argues that this could revitalise the struggling stock market. Farrugia believes that offering substantial tax incentives could lead to a transformation in the UK market over the next decade, increasing liquidity and allowing the public to invest in high-quality companies. He also noted that the existing reforms, including the Mansion House reforms aimed at unlocking £50bn of pension funds, are insufficient without a shift in the mindset of entrepreneurs towards initial public offerings. Last year, 88 companies delisted from the London Stock Exchange.

Financial leaders are urging the Financial Conduct Authority (FCA) to abandon its proposed diversity targets, citing concerns that such regulations could hinder growth. Nikhil Rathi, the FCA’s chief executive, has been approached by several industry heads who argue that diversity, equity, and inclusion (DEI) rules would introduce unnecessary bureaucracy. One City chief remarked: “The majority of the [finance] industry has long been unconvinced by the rationale for this.” Critics warn that the FCA’s plans could lead to a burdensome reporting regime, with one source stating: “The only certainty of its impact will be to create jobs in HR.” As the FCA awaits direction from the Labour Government, the debate continues over the balance between promoting diversity and ensuring economic growth. Rachel Reeves, the Chancellor, has been told that the FCA’s diversity initiatives could cost the City up to £1bn.

Sam Woods, chief executive of the Bank of England’s Prudential Regulation Authority (PRA), has indicated a willingness to “significantly” reduce regulatory burdens in response to government pressure. In an interview with the Times, Woods stated: “We are very clearly at a turning point,” suggesting that the financial sector’s resilience allows for a “declutter” of regulations. Chancellor Rachel Reeves has urged regulators to eliminate barriers that hinder economic growth. While the PRA has already relaxed some rules since gaining a secondary objective to facilitate growth in 2023, Woods reassured that essential safeguards from the 2007-09 banking crisis will remain intact, cautioning that “anybody in my line of work who believed that they had eliminated the risk of future financial crises would be completely insane.” He has proposed further reforms to streamline the PRA’s principles, particularly those related to climate and the environment.

New EU product safety regulations have forced small and medium-sized enterprises (SMEs) to suspend sales to the bloc and Northern Ireland since mid-December. Roger Holden of Skye Weavers expressed frustration, stating: “What I find extraordinary is it has gone pretty much under the radar.” The General Product Safety Regulation (GPSR), effective from 13 December, requires British companies to appoint a “responsible economic operator” within the EU to manage product issues. This has caused confusion and additional costs for SMEs, as highlighted by William Bain, head of trade policy at the British Chambers of Commerce, who noted that the UK Government has not adequately communicated these changes.

AstraZeneca has cancelled its planned £450m investment in a vaccine manufacturing plant in Merseyside, citing the Labour Government’s failure to match the previous Government’s support offer. Under the Tories, around £70m was on offer in grants, as well as £20m in research and development support from the UK Health Security Agency. An AstraZeneca spokesperson said: “Following discussions with the current Government, we are no longer pursuing our planned investment in Speke. Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous Government’s proposal.” Despite the cancellation, the existing facility will continue to operate without job losses.

Link has announced its 200th banking hub recommendation in response to the ongoing closures by Lloyds Banking Group, which plans to shut down 136 branches. The Government has committed to establishing 350 hubs by 2029, with Link already assessing the impact of 1,784 bank branch closures. John Howells, CEO of Link, emphasised the commitment to maintaining cash access, saying: “The hubs will make a real difference for the millions of people who still rely on cash.”

Barclays has announced that a significant IT glitch, which left numerous customers unable to access their accounts for three days, has now been resolved. The bank confirmed that the “technical issue” first reported on Friday has been fixed, and delayed payments are being processed. In a statement, Barclays said: “We are very sorry for any disruption and will ensure that no impacted customer is left out of pocket.” The glitch is not suspected to be linked to any cyber attack or malicious activity.

The UK’s Minister for Fraud, Lord Hanson, has pledged to combat a significant rise in fraud incidents, which surged by 19% to nearly 4m cases in the year leading to September, as reported by the British Crime Survey. He described fraud as a “truly shameful crime,” highlighting the severe financial and emotional toll on victims. A new fraud strategy is set to be introduced, including a new offence of failure to prevent fraud. The Office for National Statistics noted that bank and credit account fraud rose by 15% to approximately 2.2m incidents, while consumer and retail fraud increased by 26% to about 1m incidents. Lord Hanson said: “As dedicated Minister for Fraud, it is my number one mission to root it out and crack down on the callous individuals who enable it.”

The UK’s growth outlook for 2025 has been significantly downgraded, with the economy expected to grow by only 1% this year, according to the EY Item Club. This reduction follows a disappointing end to 2024, attributed largely to the Chancellor’s tax-raising Budget, which has dampened business confidence and investment. Matt Swannell, chief economic advisor to the EY Item Club, said: “A weaker-than-expected finish to 2024 left the UK economy with a greater hill to climb to achieve moderate growth this year.” The potential for a global trade war, instigated by Donald Trump, poses additional risks, although the UK is less exposed than other economies.

According to a study from Oxford University, women exhibit less trust in the Bank of England compared to men, primarily due to their heightened awareness of inflation’s impact on daily expenses. The study highlights that women, who often manage household budgets, notice rising prices sooner, leading to a sense of financial pressure. Authors Michael McMahon and Lovisa Reiche noted: “Women feel more financially squeezed, while men may try to proactively avoid financial losses.”