Activity in the construction sector experienced a significant decline in January, marking the first contraction in nearly a year. The S&P Global purchasing managers’ index (PMI) for construction fell from 53.3 in December to 48.1 in January, below all forecasts from economists surveyed by Reuters. Key factors contributing to the downturn include economic uncertainty and delayed decision-making on major projects. Kelly Boorman, national head of construction at RSM UK, commented: “Construction is also bracing for post-budget headwinds including rises to employers’ National Insurance contributions which could worsen labour shortages,” while Atul Kariya of MHA warned that the industry – and the wider economy – “are now starting to see the full impact of the proposed tax rises and increased labour costs in the Autumn Budget.” Despite the challenges, Elliott Jordan-Doak from Pantheon Macroeconomics anticipates a rebound in activity “as the weather drag abates, interest rates are cut and potential planning reforms… keep a floor under activity.”

Retail footfall was up 1.4% year-on-year in January, marking the first annual growth in the opening month of the year since 2016. Analysis by MRI Software shows that shopping centre footfall was up 1.8%, while retail parks saw a 1.4% increase and high street footfall rose 1.1%. Separate analysis from BDO shows that while in-store sales were up 3.2% in January, there was a heavy reliance on discounted purchases. Sophie Michael, head of retail and wholesale at BDO, said January trading “requires heavy encouragement through discounting,” adding that “this delayed spending will no doubt have a significant impact on already-thin margins.”

The appointment of Doug Gurr, former head of Amazon UK, as interim chair of the Competition and Markets Authority (CMA) has raised alarms among tech experts. A coalition, including the News Media Association, Firefox developer Mozilla, consumer group Which? and the Future of Technology Institute, has expressed concerns in a letter to Chancellor Rachel Reeves, saying: “The CMA’s independence must be rigorously defended if it is to pursue its mission in the face of aggressive lobbying from tech companies and other vested interests, whose sole aim is to defend the moats protecting their monopoly rents.” They fear that Mr Gurr’s background may compromise the CMA’s commitment to enforcing competition in the digital market.

Abby Thomas has left her role as head of the Financial Ombudsman Service (FOS). Ms Thomas, who has been chief executive and chief ombudsman since October 2022, has reportedly been at the centre of several disputes with fellow directors over issues including the fees for claims management companies, with it said that she was reluctant to start charging firms for bringing cases. Sources suggest that Ms Thomas had lost the confidence of the organisation’s chair, Baroness Manzoor. Deputy chief ombudsman James Dipple-Johnstone will step in as chief ombudsman on an interim basis, while chief finance and risk officer Jenny Simmonds will cover the CEO role.

Experts have warned that growing pay gap between public and private sector roles in cybersecurity pose a risk to national security. With analysis by Naoris Protocol showing that salaries for key cyber security positions in the private sector can be nearly double those offered by the public sector, there are concerns that the Government will struggle to secure and retain talent. National Audit Office analysis shows that one in three cyber security roles within the Government were either vacant or filled by temporary staff in 2023/24, while a recent report by Spotlight on Corruption warned: “The loss of skilled cyber professionals to the private sector is leaving critical roles unfilled, weakening national defences against cyber-attacks.”

Sabbaticals have been shown to have a positive impact on mental and physical well-being, creativity, and confidence. However, many organisational leaders express scepticism about the practicality of facilitating them, as they may not be able to cover the absence or function effectively without a key member. However, the benefits to organisations of offering sabbaticals far outweigh the risks. Some leading companies, such as Adobe, Autodesk, Automattic, Genentech, Deloitte, Bank of America, and the Big Five tech companies (FAANG), have implemented sabbaticals, sometimes forced by their founders. The percentage of U.S. employers with formal policies supporting extended leave has doubled from 2019 to today. Offering sabbaticals can be a differentiator to attract talent, increase retention, and rejuvenate long-tenured employees.

Aberdeen & Grampian Chamber of Commerce has urged Chancellor Rachel Reeves to reduce the 78% tax burden on North Sea oil and gas producers, including BP and Shell, to enhance the UK’s energy security amid rising trade tensions. The current Energy Profits Levy, which imposes a 38% additional tax on oil and gas production, is seen as detrimental to investment and production levels, which are at historic lows. The chamber argues that the tax rates should be adjusted as “price conditions long having long returned to normal levels.”

Many UK investment platforms have been breaking HMRC rules by allowing stocks ineligible for tax relief to be put in ISAs, according to a City AM investigation. Platforms including AJ Bell, Fidelity, and Interactive Investor have been allowing stocks that should not get tax-free status to be added to ISA portfolios, meaning capital gains tax will not be paid on their returns. City AM’s Elliot Gulliver-Needham says the transgressions “raise questions over the compliance oversight of investment platforms,” as well as the failure of the Financial Conduct Authority to detect such issues. He also warns that retail investors could be hit if previously tax-free assets are moved to a general investment account, making them liable for capital gains tax.

Reintroducing tax-free shopping for EU visitors could significantly enhance growth and tax receipts, according to Paul Barnes, chief executive of the Association of International Retail. In a letter to the Times, he argues that this initiative could create a market worth £10bn annually in the UK and generate an additional £3.7bn for the Treasury.

The Bank of England has cut interest rates from 4.75% to 4.5%, taking the base rate to the lowest level for more than 18 months. Bank Governor Andrew Bailey said the Monetary Policy Committee is “monitoring the UK economy and global developments very closely and taking a gradual and careful approach to reducing rates further.” The Bank has also halved its growth forecast, saying that it expects the economy to grow by 0.75% in 2025, with this down from a previous estimate of 1.5%. In its quarterly inflation report, the Bank said economic growth had been “broadly flat since March last year.” While the economy saw zero growth between July and September, the Bank expects a decline of 0.1% in Q4, having previously forecast growth of 0.3%. The Bank expects the economy to grow by 0.1% in Q1 2025. It had predicted growth of 0.3%. It also forecasts that inflation will rise to a peak of 3.7% in the third quarter of this year, up from a previous estimate of 2.8%.

British households expect inflation to hit 3.5% in a year’s time, according to a monthly poll from Citi and YouGov, with this down on a previous estimate of 3.7%. For five to 10 years’ time, respondents said they expect the rate to be 3.7%, down from 3.9%. Citi economist Benjamin Nabarro commented: “With headline inflation set to accelerate markedly over the coming months, uncertainty around underlying inflation dynamics is likely to remain elevated for some months yet.”

Analysis by Telegraph Money shows that a typical British family is now £15,000 poorer annually compared to five years ago, primarily due to increased taxes, mortgage rates, and energy bills. The pandemic significantly boosted demand for housing, with average detached property prices rising by £50,000 from January 2020 to late 2021. However, families are now facing higher mortgage rates, with repayments increasing by nearly £3,800 annually. Despite a rise in pre-tax income, families are feeling the pinch as their disposable income has only increased by 3.4% in real terms. The energy crisis has exacerbated the situation, with energy bills and council tax rising significantly since 2020.