Recent data reveals that nearly 40% of small and medium-sized enterprise (SME) owners in the UK are contemplating leaving the country due to escalating taxes and costs. The survey, conducted by Handelsbanken Wealth & Asset Management, indicates that many owners are attracted to better financial conditions abroad, with Spain, the United States, and France being the top destinations. Kevin Fitzgerald, UK managing director at Employment Hero, stated that the Government has “failed to support small businesses.” The tax burden is projected to rise to 38.3% by 2027, further straining SMEs, which are already under pressure from rising employment costs and changes to workers’ rights. The potential mass departure of SME owners could significantly impact the UK economy, following a similar trend seen with non-doms.

Recent data from the Office for National Statistics (ONS) indicates that UK wages have continued to grow, with average weekly pay increasing by 5.9% for the three months leading to February. The growth matches the previous quarter’s figures, marking the highest level since April last year. Notably, wages have outpaced inflation by approximately 3%, driven by pay rises for the public sector. However, the job market has taken a hit, with vacancies falling to 781,000, the lowest since the Covid pandemic, and below pre-pandemic levels for the first time. Despite the wage growth, the unemployment rate remains steady at 4.4%. Experts suggest that while the recent rise in the national minimum wage may keep earnings elevated in the short term, economic uncertainties could lead to easing wage pressures.

Millions of Brits are set to face increased income tax payments due to a freeze on tax bands, with around 11m expected to start paying the basic rate by 2028. The majority affected are over 60, indicating that pensioners may have to sacrifice part of their retirement income. The tax burden is projected to reach nearly 38% of the UK’s GDP, a post-war high, with the Office for Budget Responsibility forecasting income tax receipts could hit £322bn by 2030. “The lengthy freeze is resulting in a significant tax rise by stealth,” said Quilter expert Rachael Griffin. “As the state pension rises while the personal allowance remains stagnant, many pensioners will soon find themselves having to pay back a proportion of their state pension.” Chancellor Rachel Reeves has pledged not to raise taxes for workers, but the freeze represents a real-terms tax increase for many.

The US vice-president has said Donald Trump’s administration is hopeful that a “great” trade deal can be struck with the UK. In an interview on Tuesday with the website UnHerd, JD Vance said he was optimistic both sides could come to a mutually beneficial agreement. Vance said the “reciprocal relationship” between the US and UK gave Britain an advantage over other European countries which are more dependent on exporting to the US but tough on a lot of American businesses. However, Lord Frost, who led Brexit negotiations under Boris Johnson, warned Sir Keir Starmer that aligning more closely with the EU on food and veterinary standards, for example,  would make negotiations with the US more difficult. “We would be selling away our ability to set our rules for no real benefit…[the] world has changed, and they can’t adjust their policy. That’s fundamentally what the problem is.” Nigel Farage, the Reform UK leader, agreed, stating: “It is a very, very silly thing to do in a world that is fast changing. What I prioritise is keeping our hands free. Long term, financially, America is a much bigger goal.”

The Big Four accounting firms have faced significant regulatory fines, totalling over £154m in the last five years, according to the Financial Reporting Council (FRC). KPMG leads the pack with 11 fines amounting to over £81.8m, including a record penalty related to its auditing of the collapsed construction firm Carillion, which had nearly £7bn in debt. The FRC described KPMG’s failures as “exceptional” due to a lack of a “rigorous and robust approach.” PwC follows with eight fines totalling over £34.7m, while EY incurred the lowest fines at over £18m. Ritwick Ghosh, Counsel at Signature Litigation, remarked: “Although the FRC’s view is that the largest firms have now improved audit quality…it has warned firms not to ‘rest on their laurels’.” The ongoing fines reflect the challenges the Big Four face amid a push for regulatory reform.

Inflation in the UK is projected to remain above the Bank of England’s target of 2% for March, with a Bloomberg poll indicating a year-on-year consumer price inflation (CPI) of 2.7%. This figure is slightly lower than the previous month, driven by rising alcohol prices and costly apps. The UK is still recovering from a peak inflation rate of 11% in late 2022. Most economists have said that US President Donald Trump’s sweeping tariffs from China will have a deflationary effect on prices in the UK due to weaker demand and cheap products flooding into Britain.

The energy regulator, Ofgem, has announced new rules to expedite the connection of wind and solar farms to the power grid, aiming to resolve long-standing delays. The current first-come, first-served system will be replaced, allowing projects expected to be operational by 2030 to be fast-tracked. Ofgem chief executive Jonathan Brearley said: “This is a historic decision which supercharges Britain’s clean power ambitions,” potentially unlocking up to £40bn a year in private investment. The new approach is designed to eliminate “zombie projects” and enhance energy security, benefiting various sectors including electric vehicle charging and data centres.

According to EY’s global AI sentiment index, while 70% of UK adults have used AI in their personal lives recently, only 44% have adopted it in their professional roles, significantly below the global average of 67%. Catriona Campbell, EY UK&I client strategy leader, said: “AI’s potential excites people as much as it concerns them.” The study highlights a generational divide, with younger respondents showing more comfort with AI compared to older generations. Concerns about privacy, misinformation, and reliability are prevalent, with 71% worried about security breaches. The UK scored 54 out of 100 on the index, below the global average of 68. As the Government promotes a ‘pro-innovation’ AI strategy, industry groups are calling for clearer guidelines to foster responsible AI integration while maintaining public trust.