More than a fifth of working-age adults in the UK are not in work or actively looking for work, with the economic inactivity rate standing at 21.5% in the three months to January. This marks a decline on both the previous quarter and year-on-year. Office for National Statistics (ONS) data shows that there are currently 9.27m people classified as economically inactive. The report shows that economic inactivity for all age groups fell by 0.6% over the year and 0.2% on the quarter. Wages excluding bonuses grew 5.9% in the quarter, compared with the previous year. Meanwhile, growth in average weekly earnings, including bonuses, fell to 5.8%. In real terms, with inflation taken into account, regular pay grew 2.2%. Redundancies increased to 124,000 in the three months to January, marking the first increase in a year. Liz McKeown, ONS director of economic statistics, said the labour market is “relatively unchanged,” noting that the number of employees on payrolls is “broadly flat,” with little growth seen over the last year.

According to a recent survey by BusinessLDN, over 80% of firms in London are facing recruitment challenges, with nearly half struggling to find suitable candidates. The survey, which polled 1,000 companies, found that 45% of businesses cited remote work demands as a barrier to hiring. Mark Hilton, a director at BusinessLDN, noted that the labour market is “cooling” as firms brace for potential economic changes. Additionally, over a third of companies expressed dissatisfaction with their workforce’s skills, particularly in English and basic maths. To combat these issues, 80% of firms plan to increase investment in employee training.

The Bank of England has held interest rates amid concern over growing trade tensions and “geopolitical uncertainties,” with the Bank’s Monetary Policy committee voting by a majority of eight to one in favour of holding rates at 4.5%. Governor Andrew Bailey said interest rates remain “on a gradually declining path,” noting that the Bank expects a “bit of a pick-up” in inflation this year but adding that it will gradually fall over time. He added that it is the Bank’s job to “make sure that inflation stays low and stable.” Meanwhile, Chancellor Rachel Reeves said the Government has “work to do” to ease inflation. Inflation currently stands at 3%, exceeding the Bank’s 2% target.

Shevaun Haviland, director general of the British Chambers of Commerce, has warned that hiking National Insurance costs for employers “is going to be really hard for business.” She highlighted that firms expect to “put up prices, they’re going to reduce investment, they’re going to stop recruiting.” “It’s going to be a while until we see the real impact,” Ms Haviland told BBC Radio 4’s Today programme, noting that “businesses are reviewing their plans.” Ms Haviland added: “So what we want to see from the Government is that they focus on how they can drive growth. Let’s decrease taxes in the future, let’s focus on infrastructure builds, and let’s help our businesses get trading around the world.”

Tory leader Kemi Badenoch has launched the Conservative party’s local election campaign, promising lower taxes and improved services.

According to a poll of 1,000 SME owners commissioned by Samsung, businesses are losing an average of 98 hours annually due to technical issues, which translates to 12 working days. The survey revealed that nearly a third of respondents struggle with slow internet, while another third face problems with outdated laptops. The research indicates that 67% of SMEs have had to cancel important meetings due to tech failures, and 59% feel their devices often let them down. Furthermore, 67% believe productivity could increase by nearly 40% with better technology.

NatWest has partnered with OpenAI to enhance its digital assistants and customer support through artificial intelligence, marking a significant collaboration for a bank. The lender, which is exploring over 275 AI projects aimed at improving customer experience and reducing financial fraud, said the OpenAI tie-up will see it deploy “some of the latest and most powerful developments in generative AI.” Natwest’s retail banking chief executive, Angela Byrne, said: “Around 80% of our retail customers bank with us entirely digitally, which is why continually innovating to deliver the best digital experience possible is a non-negotiable.” NatWest says GenAI functionality offered by customer-facing chatbot Cora has helped to drive a 150% improvement in customer satisfaction levels and reduce the number of times a human adviser is called on to complete a request.

London is gaining ground on New York in the battle to be the world’s top financial centre, closing the gap in think-tank Z/Yen’s Global Financial Centres Index. London remains in second place with a rating of 750 points but has closed the gap with New York to just seven points, having risen by 12 points since September. Hong Kong retained third position ahead of Singapore on an index compiled using quantitative measures provided by third parties including the World Bank, United Nations and the OECD and 4,946 responses to a GFCI questionnaire for industry participants. London was in the top three centres for all eight major industries and scored first for banking.

UK households expect inflation to hit 3.9% in the year ahead, according to a Citi/YouGov survey. The poll for February saw an increase from the 3.5% recorded in January and marks the highest level since January 2024. Longer-term expectations rose to 3.9% in February from 3.7% in January.