UK employers scaled back hiring in Q1, with British Chambers of Commerce (BCC) analysis showing that just 20% of firms increased their workforce in the first quarter. This is the lowest level since the first three months of 2021. The poll of more than 5,000 businesses also found that 17% reduced headcount in Q1. Jane Gratton, the BCC’s deputy director of public policy, said: “Firms are struggling under the weight of skills shortages, recruitment difficulties and spiralling employment costs.” This comes with the rate of employer National Insurance contributions climbing from 13.8% to 15% and the earnings threshold being reduced from £9,100 to £5,000. Firms are also contending with a rise in the minimum wage. Business leaders are also concerned that the Government’s proposed Employment Rights Bill will make it harder to recruit and retain staff.

The Bank of England has warned that a trade war stemming from President Donald Trump’s tariffs for imports into the US could destabilise the UK’s financial system and depress growth. The Bank’s Financial Policy Committee said: “As the UK is an open economy with a large financial sector, global risks are particularly relevant to UK financial stability.” Officials noted, however, that the UK banking system has “the capacity to support households and businesses, even if economic and financial conditions were to be substantially worse than expected,” highlighting that banks have “high levels of liquidity.”

Analysis by Consensus Economics shows that City analysts have cut UK growth forecasts due to uncertainty caused by new US tariffs. The report shows that forecasters expect the economy to grow by 0.8% this year, with this around two thirds the rate of previous estimates. Before President Donald Trump announced the new charge on imports into the US, the Bank of England said it expected the UK economy to grow 0.75% in 2025, while the Office for Budget Responsibility predicted growth of 1%.

Marcus Bokkerink, former chair of the Competition and Markets Authority (CMA), has warned the Government against political interventions that undermine the regulator. Mr Bokkerink, who was replaced at the competition watchdog amid a government drive for regulators to prioritise economic growth, said: “Recent interventions and steers undermine the CMA’s ability to promote competition to the status quo.” He has called for the CMA to be given more powers to protect consumers and for the Government to take a bigger role in decision-making in areas “where there is a natural monopoly.” He also argues that ministers should bring more effective competition into public procurement; make competition policy more predictable through structural reform; and “level the tax and regulatory playing field” between different businesses competing in the same market.

UK firms overpaid more than £14bn in corporation tax in the last tax year, according to analysis by UHY Hacker Young. Data shows that British businesses overpaid £14.2bn in corporation tax to HMRC in the year to April, with around 400,000 companies handing over too much. The report suggest that HMRC leads firms to higher than necessary corporation tax, with businesses facing financial penalties if profit comes in lower than had been expected. UHY Hacker Young said the system can cause “significant cash flow problems,” noting that companies have to reclaim excess payments themselves. An HMRC spokesperson said the claims are “nonsense and disappointing to see,” with companies responsible for assessing their own tax liability.

Culture Secretary Lisa Nandy says an agreement over the future of British Steel is “achievable and within sight.” This comes with the Government considering nationalising the business, which is owned by Jingye. The Chinese firm says it has invested more than £1.2bn to maintain operations at British Steel and claims to have suffered financial losses of around £700,000 a day. Ms Nandy said she is “absolutely confident” that ministers “are doing every single thing that we can to secure the future of British Steel.”

Rachel Reeves says it is “imperative” for the UK to improve its trading relationship with the EU. This comes as new US import tariffs have prompted concern over a global trade war. The Chancellor said that while it has been harder for British firms to export around Europe since Brexit, with many feeling “shut out” of European markets, “I feel that in the current environment, there is a greater willingness from countries around the world to look at both tariff and non-tariff barriers that are holding back trade.” Ms Reeves said the UK-EU summit in May will be a chance “to refresh our relationship and make it easier for businesses to trade.”

Fraud continues to plague the UK, accounting for approximately 40% of all crime, with an estimated 3.2m offences annually costing £6.8bn. A report from the cross-party Treasury Select Committee in 2022 highlighted that “economic crime is a major and rapidly growing problem in the UK,” calling for increased funding and a dedicated body to combat it. In response, a public-private partnership between the City of London Police and Gowling WLG aims to assist fraud victims in recovering lost funds. The initiative follows a successful pilot that helped an elderly victim recover over £2m lost to a cryptocurrency scam. The focus on civil recovery may provide a more effective route for victims, as the burden of proof is lower than in criminal cases.

The interest paid on long-term government debt has hit the highest level since July 1998. The yield on 30-year gilts – the interest paid on UK government debt – has risen amid uncertainty caused by US tariffs on imports. Michael Metcalfe, head of macro strategy at State Street Global Markets, warned: “If yields go up and stay up this causes problems for the UK fiscal position and could put pressure on sterling as well.” The increase has largely been caused by a spike in US Treasury yields, which have soared as banks sell off bonds to raise cash for clients withdrawing their money.

MPs have called for streaming giants like Netflix, Disney, Amazon and Apple to pay a “Netflix tax” of 5% on their UK revenues to fund high-quality British TV shows. The Culture, Media and Sport Committee said: “Streamers laud the UK’s mixed production ecology… but their business practices are putting that at risk.” The MPs propose a voluntary cultural fund, with government intervention if necessary.