Confidence among high net worth individuals (HNWIs) in the UK economy has plummeted to a record low, with only 48% expressing faith, down from 84% six months ago, according to the latest Saltus Wealth Index Report. This decline follows a series of unpopular policies and gloomy economic indicators, with many HNWIs fearing further tax increases. Mike Stimpson from Saltus remarked: “The extent to which the confidence of high net worth individuals has collapsed demonstrates a missed opportunity for the new Government.” The report highlights that over 80% of HNWIs anticipate tax hikes in the coming year, particularly in capital gains tax, income tax, and inheritance tax. Dr Michael Peacey of the University of Bristol noted that the decline reflects significant shifts in sentiment regarding taxation, with many regretting their support for Labour due to tax changes.

JP Morgan is grappling with a significant desk space shortage at its Canary Wharf headquarters, where it is unable to accommodate all 14,000 London staff despite a mandate for a full return to the office. The policy has faced backlash, however, with over 1,000 employees signing a petition initiated by JPMC Workers, calling for an expansion of the hybrid working policy due to concerns over “increasing toxicity” and “unnecessary friction” in the workplace. Jamie Dimon, the bank’s CEO, gave the petition short shrift suggesting that employees could leave if they disagreed with the new policy. Dimon went on to say that staff had not been paying attention during Zoom meetings, which was reducing efficiency and creativity. He also said that in-office requirements would not be left up to managers, adding: “There is no chance that I will leave it up to managers. Zero chance. The abuse that took place is extraordinary.”

Business Secretary Jonathan Reynolds has raised concerns about the number of regulators in the UK, suggesting a potential overhaul of the regulatory landscape. This comes as the Government outlined a new mandate for the Competition and Markets Authority (CMA), aiming for a more growth-focused approach. The draft “strategic steer” for the CMA stresses the need to enhance the UK’s attractiveness for international investment. CMA chief executive Sarah Cardell responded by announcing plans to expedite merger consultations, reducing the review period from 65 days to 40 days. “We know speed of decision making is vital to reduce uncertainty and costs for businesses,” Cardell said. The CMA’s recent leadership changes reflect ongoing frustrations with its perceived interventionist stance.

Barclays has disclosed ongoing investigations by the Financial Conduct Authority (FCA) regarding alleged deficiencies in its anti-money laundering controls. The bank’s annual report revealed a £90m provision for potential car finance mis-selling costs linked to a separate FCA inquiry. The new investigation “focuses primarily on the historical oversight and management of certain customers with heightened risk,” as stated by Barclays. This follows a history of fines, including a £40m penalty last year for payments to Qatari investors deemed “reckless.” Additionally, Barclays is grappling with challenges from UK tax authorities over bank levy legislation. Despite these issues, Barclays reported a £1bn net profit for the fourth quarter, a significant increase from the previous year, although shares fell by 4.7% due to concerns over future outlook.

Unilever has announced that its ice-cream business will have a primary listing in Amsterdam, in a fresh blow to London. Business Secretary Jonathan Reynolds said he was disappointed at the news. “I would have liked Unilever to have listed in the UK,” he said, before adding that the UK needed to do more to attract listings. The new company will also be listed in London and New York, but the Netherlands was chosen due to the division’s headquarters and management location. The demerger is part of a broader restructuring plan, which includes cutting 7,500 jobs and selling underperforming brands. Unilever’s recent earnings report showed a 4.2% rise in underlying sales, but growth expectations remain muted.

Dog breeders, pet sellers, and waste management workers in Britain are facing a tax crackdown due to concerns over how cash-in-hand work may be contributing to the black economy. An estimated 520,000 individuals in these sectors must now register for tax to obtain or renew their operating licences. HMRC has identified these industries as “vulnerable to hidden economic activity.” The black economy has reportedly grown by 80% over the past seven years, with one in 11 adults now involved. It comes after taxi drivers and scrap metal dealers were told in rules introduced in 2022 that they had to be registered for tax to obtain or renew their licences. HMRC anticipates that overall, around 800,000 businesses will be affected by the new measures, which require proof of tax registration for licence renewals.

Sir Keir Starmer has defended the Government’s changes to inheritance tax relief for farms amidst a farmers’ protest during his visit to Milton Keynes. He stated that voters must choose between additional funding for the NHS and maintaining tax breaks for farmers, saying: “You can’t have both.” However, the PM was criticised for failing to talk to the farmers choosing to drive off instead. Farmer Richard Miles, who travelled from Welford, Northamptonshire, to take part in the protest, said: “We are not being listened to at all, that’s why we feel we have to come and see him in person.”

Institutional investors managing $1.5tn in funds are urging asset managers to enhance their climate action efforts or face potential fund withdrawals.

The UK economy is facing a potential £24bn impact due to President Donald Trump’s announcement of reciprocal tariffs on countries imposing VAT. The move could lead to a 21% levy on UK goods exported to the US. The National Institute of Economic and Social Research (NIESR) warned that such tariffs could reduce UK economic growth by 0.4 percentage points over the next two years. William Bain, head of trade policy at the British Chambers of Commerce, said the proposals would create “more cost and uncertainty for investors, businesses and consumers.”

The UK economy experienced modest growth of 0.1% in the fourth quarter of 2024, easing immediate recession fears, according to the Office for National Statistics (ONS). Despite this, a measure of GDP per head revealed a contraction for two consecutive quarters, indicating ongoing challenges. The Government faces pressure to stimulate growth amid rising inflation and increased costs for essential services. The Bank of England’s projections suggest a growth forecast of only 0.75% for 2025, down from earlier expectations.

Huw Pill, Chief Economist at the Bank of England (BoE), has stressed the need for caution in cutting interest rates as the process of disinflation had not yet been completed. Despite a recent rate cut, inflation remains above the BoE’s 2% target, currently at 2.5%, and is expected to rise to 3.7% later this year. Pill went on to point out that the main issue affecting the economy is supply-related, rather than demand-driven, and warned that sharp rate cuts may not resolve long-term inflationary trends. Employers anticipate raising wages by an average of 3.7% this year, which Pill believes is not aligned with achieving the 2% inflation target.

Recent data from a Freedom of Information (FOI) request has revealed a strikingly low number of complaints against senior leaders, with only 96 out of over 15,000 misconduct reports to the Financial Conduct Authority relating to them. This figure has raised concerns among City veterans, who describe it as “suspiciously few” and “concerning.” The UK’s senior managers’ and certification regime (SMCR) was intended to enhance accountability among senior City workers, yet enforcement actions remain minimal. Nikhil Rathi, FCA chief, noted: “We would only get involved if there is… very serious or persistent behaviour.” Britt Johnston from Natixis said that if senior leaders do not perceive a genuine risk of enforcement, the regime may become ineffective.