The UK is at risk of becoming an “incubator economy” as tech start-ups are increasingly being acquired by international competitors, warns Universities UK. Eleanor Busby reports that university-established start-ups are lured abroad due to insufficient funding for growth in the UK. The analysis by Universities UK (UUK) predicts that with adequate support, around 27,000 new start-ups could emerge by 2028, generating a turnover of approximately £10.8bn. Vivienne Stern, chief executive of UUK, said: “The growth in university supported start-ups over the last decade has been a staggering success but we can do more… to ensure that they can remain in the UK and grow here.” The Federation of Small Businesses also stressed the importance of universities in fostering entrepreneurship, highlighting regional disparities in support.

City forecasters have revised their inflation expectations upwards while cutting growth forecasts for the UK economy. The average GDP growth forecast for this year has been lowered to just 1%, down from 1.1% in February. The OECD has also reduced its 2025 growth forecast from 1.7% to 1.4%. The consumer price index is now expected to average 3% this year, significantly above the Bank of England’s target of 2%. With rising inflation and stagnant growth, traders anticipate no further cuts to the BoE base rate, which is currently at 4.5%.

The Confederation of British Industry (CBI) chief, Rain Newton-Smith, has warned the Government against imposing further burdens on businesses following recent welfare cuts. Work and pensions secretary Liz Kendall announced measures aimed at saving taxpayers over £5bn annually by 2029-30, primarily through stricter eligibility for personal independence payments (PIP). The Government also plans to introduce a ‘right to try’ legislation, allowing individuals to explore job opportunities without jeopardising their benefits. Newton-Smith said: “If we want to see growth in our economy… we need to not make it more costly or risky to hire people.”

Sir Keir Starmer has failed to reaffirm the Chancellor’s commitment to not extend the freeze on income tax thresholds, which were initially set by the previous Conservative government until April 2028. Conservative leader Kemi Badenoch pressed Starmer to repeat the pledge during PMQs on Wednesday. Meanwhile, several papers report that Rachel Reeves is expected use her Spring Statement next week to cut public spending rather than raise taxes further. Moreover, any cuts would be delivered by reducing the funding limits available to Whitehall departments at the spending review in June, which will allocate departmental budgets up to 2029.

The Financial Reporting Council (FRC) has published the first in its series of supporting materials to help SMEs to engage with the annual audit process effectively and confidently. A summary document provides owners and managers, as well as other stakeholders, with an introduction to audit standards, setting out the role International Standards on Auditing (ISAs) play in delivering transparent and accountable capital markets, and setting out the process for the development of standards in both the UK and international context.

The UK Government is set to implement significant reforms granting unions the right to access staff intranets and workplaces for recruitment purposes. This overhaul, described as the most substantial in a generation, could cost businesses up to £5bn annually. The Central Arbitration Committee will enforce compliance, with penalties potentially mirroring those for data protection breaches. Business groups have expressed concerns over the lack of clarity in the new measures, while unions have welcomed the changes. Lord Elliott of Mickle Fell, president of the Jobs Foundation, which champions the role of business, said: “Alongside welfare reform, the government must recalibrate the Employment Rights Bill to encourage job creation and.. stop penalising business owners for employing more people.”

Santander has announced the closure of 95 branches, putting up to 750 employees at risk of redundancy. This decision is part of a structural overhaul set to begin in June 2025, reducing its network to 290 full-service branches, 36 with reduced hours, 18 counter-free branches, and 5 work cafes. The bank pointed to a “rapid movement” towards digital banking, with digital transactions increasing by 63% since 2019, while in-branch transactions fell by 61%. Meanwhile, nineteen new banking hubs have been recommended by cash access network Link, following Santander UK’s announcement that it is set to shut more branches.

A leaked assessment from within Whitehall reveals that Labour’s Net Zero plans could potentially reduce the UK’s economic growth by 10% by 2030. The document warns of a “potential risk of destabilising the financial system” due to inadequate planning. The report highlights the threat of “stranded assets,” which may not be fully accounted for in company valuations, and warns that an abrupt transition could lead to significant financial shocks. Additionally, the transition may result in job losses and skills mismatches, adversely affecting growth and productivity. A government spokesman countered: “Net zero is the economic opportunity of the twenty-first century.”

According to Alloy’s State of UK Fraud Report, 79% of UK fintech firms experienced significant fraud losses, with many losing at least £500,000 in the past year. The report, which surveyed 118 director-level fintech leaders, revealed that two in five firms reported losses between £1m and £5m, while nearly 9% faced losses exceeding £5m. The report also noted that 93% of fintech leaders are most concerned about regulatory penalties and reputational damage, prompting increased investment in fraud prevention measures.

Towns with a thriving high street, a Waitrose, strong transport links, and a commuter population are prime candidates for a Gail’s bakery, according to insights from the company’s algorithm. The bakery chain favours areas where independent businesses are flourishing alongside established retailers, seeing these as indicators of a vibrant local economy. Analysis by the Telegraph found a 42% chance of a Waitrose being located near an existing Gail’s, reinforcing its middle-class appeal. Proximity to transport links, particularly to Gail’s North London headquarters, is also a key factor, with expansion plans currently limited to locations within a few hours of the capital.