Fintech SMEs in the City of London have attracted £4.3bn in equity investment since 2019, making them the leading sector in the area’s tech ecosystem, according to the Tech SME Landscape report by the City of London Corporation. The report reveals that 497 fintech SMEs represent 17.6% of all tech companies in the Square Mile. Despite a decline in 2023, investment rebounded in 2024, with £810m raised across 69 deals, more than doubling the previous year’s total. The City is set to launch the SME Gateway, an online portal aimed at supporting SMEs in accessing finance and resources for growth.

According to the latest Profit Warnings report from EY-Parthenon, the number of profit warnings issued by listed companies in Yorkshire fell by over 40% in 2024, with only 19 warnings compared to 33 in the previous year. Tim Vance, EY-Parthenon UK&I turnaround and restructuring partner in Yorkshire, stated: “Despite ongoing economic headwinds… businesses in Yorkshire displayed resilience throughout 2024.” Nationally, 19% of UK-listed companies issued profit warnings, with contract cancellations being the leading cause.

Labour’s new inheritance tax policy is set to impact 150,000 families with higher death duty bills. Starting from April 2027, the application of inheritance tax to pension wealth will introduce this levy for 31,200 families for the first time by 2030. Existing taxpayers will also see their bills increase, with the average inheritance tax liability expected to reach £169,000 in the 2027-28 tax year. Richard Wilson, chief executive of Interactive Investor, said: “The current proposals are an affront to people who have done the right thing by diligently investing through a pension throughout their working lives.” The policy could deter individuals from saving for retirement, as pensions were previously viewed as a tax-efficient means of wealth transfer.

Brussels has released guidance on the enforcement of its AI Act, which bans certain uses of artificial intelligence, including the creation of facial recognition databases and social scoring systems. The law, passed in 2023, aims to clarify compliance for companies, with a commission official stating the guidelines are designed to “explain how the prohibitions will apply.” Companies face fines of as much as $35.8m or 7% of their global annual revenues – whichever amount is higher – for breaches of the law. Tasos Stampelos, head of EU public policy and government relations at Mozilla, explained that compliance will depend on how standards, guidelines, secondary legislation or derivative instruments that follow the AI Act develop. Although some tech executives are concerned the new rules could be a burden on innovation, others say requirements around bias detection, regular risk assessments, and human oversight are instead defining what good regulation looks like. However, Politico points out that the AI Act has numerous loopholes for police and security forces.

HMRC is facing intense scrutiny from the Treasury Select Committee (TSC) regarding its enforcement of trade sanctions on Russia. Following a Sky News investigation, it was revealed that HMRC has issued six fines for sanction violations since 2022 but has not disclosed the names of the sanctioned firms or the specifics of their breaches. Dame Meg Hiller, chair of the TSC, has sent a letter to HMRC’s chief executive, Sir Jim Harra, asking: “Why doesn’t HMRC publish information on breaches in sanctions?” This lack of transparency raises concerns about the effectiveness of the UK’s sanctions regime, which is claimed to be the toughest in British history.

BT has told major investors that it intends to replace the diversity, equity and inclusion (DEI) component of its manager bonus scheme with a measure of employee engagement. The current system is based on targets for the representation of women, ethnic minorities and disabled people, and on measures of employee engagement among under-represented groups. Next year, a survey of engagement of all employees will underpin the calculation. The change comes as part of a strategic overhaul initiated by CEO Allison Kirkby, who only last week criticised companies for “stepping back from their commitment to inclusion”.

Jane Fraser, the British CEO of Citigroup, has reaffirmed the bank’s commitment to hybrid working, allowing staff to work remotely up to two days a week. This decision contrasts with other Wall Street firms like Goldman Sachs and JPMorgan Chase, which are pushing for a full return to the office. Fraser believes that this flexible approach is beneficial for recruitment. Despite concerns from some executives about the impact of remote work on corporate culture and junior staff development, Citigroup remains focused on maintaining its flexible policy. Fraser, who has been leading Citi for nearly four years, is also working to improve the bank’s performance by simplifying its operations.

Scotland has distinguished itself from other UK regions by experiencing a 5% increase in new tech hires in 2024, while the UK overall saw a 5% decline. According to RSM UK, 1,663 IT companies were incorporated in Scotland, up from 1,553 in 2023. “Scotland’s growth in comparison to other UK regions is fantastic,” said Hannah Atchison, associate director of RSM in Edinburgh. However, challenges remain, including a lack of later-stage capital and difficulties in attracting talent.

Rachel Reeves has been warned that she must either cut spending or increase taxes due to the evaporation of any fiscal leeway. The Office for Budget Responsibility’s estimates reveal that the Government’s £9.9bn fiscal headroom has been eliminated by low growth and rising borrowing costs. While she is expected to resist an emergency budget, further tax rises may be necessary in the autumn, including extending the freeze on income tax bands, the Times reports.

Recent polling by Freshwater Strategy indicates that over 70% of voters lack confidence in the Chancellor’s economic plans, with around 67% doubting her ability to manage the economy. Despite Rachel Reeves’ recent push for growth sentiment remains low. The economy has stagnated since Labour took power, compounded by £40bn in tax rises. Furthermore, EY’s ITEM Club has downgraded GDP growth expectations for 2025 to 1%, reflecting ongoing economic challenges. Many voters anticipate further tax increases, with over 50% expecting Reeves and Starmer to break a manifesto pledge by raising income tax.

British and European officials are set to commence formal negotiations aimed at “resetting” the UK’s relationship with the EU ahead of a significant summit on May 19. Nick Thomas-Symonds, the Cabinet Office minister overseeing EU negotiations, will meet with European counterpart Maros Sefcovic to discuss key issues such as security cooperation, fishing rights, and food export checks. Thomas-Symonds stressed the UK’s commitment to “ruthless pragmatism” in moving beyond the current Brexit agreement, stating: “It is through a new partnership between the UK and the EU that we will deliver for the people of the United Kingdom.” The negotiations are expected to lead to a political declaration, paving the way for a new legal trade and cooperation agreement, although a final deal is not anticipated by May. The EU is seeking concessions, including a youth mobility scheme and fishing rights, as part of the negotiations.

Gareth Davies, chief of the National Audit Office (NAO), has expressed interest in learning from Elon Musk’s US Department of Government Efficiency, particularly regarding spending cuts. In his annual speech, he highlighted the unsustainable nature of NHS and special education needs funding, stating: “A succession of NAO reports have concluded that systems have become unsustainable.” He stressed the urgent need for reform due to rising demand and costs, advocating for the integration of AI to enhance productivity.