Private sector output fell in April, with S&P Global’s composite PMI seeing the first decline since October 2023. Output fell to 48.2 on an index where a reading above 50 points to growth, marking a decline on the 51.5 recorded in March. The manufacturing PMI fell from 45.3 to just 44, while the service sector hit a 27-month low. S&P Global’s chief economist, Chris Williamson, said: “Businesses are reporting more of a struggle to keep their heads above water,” adding: “Job cutting remains aggressive.” Mr Williamson noted that business optimism about the year ahead has fallen to a two-and-a-half-year low, “and one of the lowest levels yet recorded by the survey.” He also highlighted a slump in exports driven by weaker global demand and rising fears over global trade as the “biggest concern.” Thomas Pugh, an economist at RSM UK, said: “It looks like the budding spurt of growth in Q1 has already been cut short.”

Concerns over a trade war in the wake of new US tariffs have hit UK business sentiment and will slow economic growth, according to a Reuters poll of economists. All of the respondents said the tariffs have negatively impacted business sentiment in the UK, while more than 40% have cut their growth forecasts

The Government borrowed more than expected last year, with Office for National Statistics (ONS) data showing that the difference between spending and income from taxes came in at £151.9bn in the year to March. This was up £20.7bn from the year before and exceeds the £137.3bn that had been forecast by the Government’s official forecasters, the Office for Budget Responsibility. Official figures also show that the debt interest paid by the Government increased by £1.3bn to £4.3bn last month. James Smith, a markets economist at ING, told BBC Radio 4’s Today programme that the cost of borrowing created a “very challenging environment for the Government,” while Professor Joe Nellis, an economic adviser at MHA, said: “These economic developments will make it very difficult for the Government to balance the books.” Ruth Gregory, deputy chief UK economist at Capital Economics, said the borrowing data increases the chance of the Chancellor having to increase taxes or cut spending, while Matt Swannell, chief economic adviser to the EY Item Club, noted that the Chancellor’s recent Spring Statement “only left a slim margin for error” against her fiscal rules. Darren Jones, chief secretary to the Treasury, said Rachel Reeves’ self-imposed rules on borrowing were “non-negotiable,” with the Chancellor having vowed not to borrow money to fund day-to-day spending.

Data shows that investment platforms have seen a surge in activity as UK retail investors rushed to “buy the dip” amid a global collapse in stock markets in the wake of the US announcing more aggressive tariffs. Camilla Esmund, senior manager at Interactive Investor, said the Aberdeen-owned investment platform recently recorded its highest-ever trading volumes, with buys accounting for 61% of trades. Lightyear, AJ Bell, and Hargreaves Lansdown also saw a spike in share trading after US President Donald Trump set out higher charges on exports to the US, with the latter seeing the proportion of buys to sells hitting four to one.

Chancellor Rachel Reeves has suggested that the UK could lower tariffs on US car imports as part of any trade deal with American officials. With the UK looking to lower trade taxes of 25% for cars, steel and aluminium and 10% on other British exports, the Chancellor suggested she was open to lowering UK tariffs on American cars from 10% to 2.5% to secure a wider trade deal with the US. Ms Reeves, who said UK negotiators are working “flat out” to get an agreement that is in the country’s national interest, said officials “are willing to reduce trade barriers in the UK, those trade barriers that do exist.” Speaking to the BBC at an International Monetary Fund event, Ms Reeves said ministers are “confident that working with our partners in the US we can get a better trading relationship,” but insisted that the UK was “not going to rush into a deal.”

Bank of England governor Andrew Bailey says the UK must take the risk of the US’ new tariff regime hitting global growth “very seriously.” On concerns over a trade war stemming from the tariffs, Mr Bailey told an Institute of International Finance: “Trade does support growth. Fragmenting the world economy will be bad for growth.”

The Financial Conduct Authority (FCA) says trust is “crucial” in the adoption of AI by financial services, with Colin Payne, the City watchdog’s head of innovation services, saying: “Trust in AI is like trying to build a house from the roof down – you need solid foundations first.” Mr Payne said: “Neither the FCA nor firms can establish this trust alone, but together we can create the environment needed for AI to flourish.” Noting that firms are “eager to innovate but need to understand how current frameworks apply to AI,” Mr Payne said the FCA is not looking to create new regulations, but instead wants to “make the ones we already have work for this burgeoning sector.”

PayPal has become the first tenant of the newly redeveloped 76 Southbank office building in London, leasing 40,000 square feet on the top floor. The Grade II-listed structure, located next to the National Theatre, has been modernised to offer 300,000 square feet of office space with outdoor terraces and digital amenities like touchless entry. “Practical completion of 76 Southbank and the arrival of PayPal will breathe new life into this brutalist icon,” said Kevin Darvishi, head of leasing at development manager Stanhope.

Shawbrook Group has made a preliminary approach to Starling Bank regarding a potential £5bn merger, as it seeks alternatives to a public listing amid a challenging UK stock market. Sources indicate that the discussions are “highly preliminary” and lack detailed terms. Shawbrook, owned by BC Partners and Pollen Street Capital, has previously explored merger opportunities, including with Metro Bank and Co-operative Bank.

Family-run businesses in the UK are increasingly reliant on intergenerational collaboration, with a recent poll revealing that 82% of owners believe it is essential for growth. The survey, conducted by OnePoll, found that older generations contribute vital qualities such as work ethic and industry knowledge, while younger members bring digital marketing skills and innovation. Despite the benefits of family support, challenges persist, with 51% citing energy costs as their biggest financial hurdle. Optimism remains high, with 85% of owners confident their businesses will stay within the family, and many are prioritising sustainable practices to ensure long-term success.