The latest figures from the Insolvency Service reveal that February saw the highest number of compulsory liquidations in over a decade, with 393 companies forced to close. This surge comes as businesses brace for rising taxes and employment costs, with David Hudson from FRP noting that both companies and consumers are “cutting their cloth, which is ultimately driving down demand.” Overall, while the total number of company closures fell by 7% year-on-year to 2,035, that figure includes firms that have chosen to shutter, rather than being forced to stop trading. The construction sector was particularly hard hit, accounting for 17% of insolvencies. Kelly Boorman at RSM UK said the industry is “already under-resourced, and the increase to labour costs will squeeze margins.” As the Bank of England maintains high interest rates, Giuseppe Parla at Menzies warns the UK may face further business collapses in the coming months.

Britain’s manufacturing sector is facing significant decline as soaring energy prices drive down investment. According to the EY Item Club, energy costs in the UK are four times higher than in the US and 50% more than in France and Germany. Peter Arnold, UK chief economist at EY, said the high energy costs were the result of running down fossil fuels without a reliable replacement. Northern regions of England will be held back by the industrial decline, EY said, adding: “New investments in renewable energy are yet to, and may never fully, replace the lost activity and employment.”

Small businesses are preparing for significant bill increases from next month, with National Insurance contributions increasing from 13.8% to 15%, with the threshold dropping from £9,100 to £5,000. Emma Jones, CBE, founder of Enterprise Nation, said: “Small employers are facing the prospect of reduced profits next month as changes to National Insurance, the National Living Wage and Business Rates Relief kick in on 1 April.” Additionally, the National Living Wage will rise by 6.7% to £12.21 per hour for over-21s. While some relief is offered through an extension of business rates relief, many small firms feel overwhelmed by the impending financial burdens.

Ministers have announced that companies with over 250 employees will be required to disclose whether their white workers earn more than their ethnic minority counterparts. This initiative aims to address pay disparities and is part of a Labour manifesto pledge. Unions have praised the move as a significant step towards achieving pay parity. However, businesses express concerns about the additional regulatory burden amid rising costs. The Office for National Statistics reported that in 2022, black workers earned approximately 6% less than white employees. Asian or Asian British employees, meanwhile, earned about 3% more than white employees. Gender pay reporting has been mandatory since 2018, but critics say it is a crude tool that can lead to perverse outcomes. For instance, a reluctance to employ women in lower paid positions or positive discrimination that unfairly penalises men applying for higher-paid jobs.

Small and medium-sized enterprises (SMEs) are postponing investment decisions due to uncertainty surrounding Chancellor Rachel Reeves’ Spring Statement, according to a survey by Bibby Financial Services (BFS). Nearly 50% of the 1,000 firms surveyed are delaying their choices until after the statement, with one fifth expressing concerns over the significant impact of national insurance contribution hikes. Despite these challenges, 87% of SMEs plan to invest this year, and two thirds anticipate increased sales.

The CBI has urged the Government to allocate £30bn for research and development (R&D) by the end of the decade, as part of the Chancellor’s efforts to enhance the UK’s competitiveness with high-innovation economies like the United States. The CBI argues that raising R&D investment would “send a strong signal to attract domestic and foreign investment.” In 2022, UK Government spending on R&D reached £15.5bn, and is expected to have reached £20bn in 2023 when the latest figures are released next month. Louise Hellem, chief economist at the CBI, said: “For [Labour’s] growth mission to succeed, government must inject business with a serious confidence boost.”

Britain’s top fintech leaders convened with Chancellor Rachel Reeves at a financial summit on Tuesday. The meeting, attended by executives from Revolut, Stripe, Wise, and Zilch, was part of the Innovate Finance’s Unicorn Council initiative, which seeks to provide policy recommendations to maintain the UK’s fintech leadership. Janine Hirt, Chief Executive of Innovate Finance, said: “The continued success of the UK fintech sector is fundamental to driving growth across the country.” Speaking after the meeting, Reeves said: “We are taking action to make our rulebook more competitive to support growth, the number one mission for our Plan for Change, and have asked the FCA to reform the regulatory structure around capital markets to make it work better for UK firms.”

The Office for National Statistics (ONS) has updated its inflation basket, reflecting changing consumer habits. Notable additions include virtual reality (VR) headsets, yoga mats, and men’s pool sliders, while oven-ready gammon joints and local newspaper adverts have been removed. Stephen Burgess, ONS deputy director for prices, said: “The addition of virtual reality headsets for the first time shows our appetite for emerging technology.” The annual sales of VR headsets are projected to rise from £350m last year to £520m by 2029. This update also highlights a shift towards convenience and online shopping, as consumers increasingly opt for quicker meal options and digital platforms. The latest inflation figures show a rate of 3% as of January, down from a peak of 11.1% in late 2022.

The FT reports on a new breed of “coachbots” that draw on generative AI and offer a cheaper version of a service that has hitherto been largely reserved for senior executives.