Rachel Reeves is set to announce significant changes to pension fund investments, aiming to direct more funds towards UK businesses. However, industry leaders express concerns that this could leave millions of pension savers poorer. The FT reports that pension funds may be required to allocate 10% of their assets to private funds, with half of that in the UK. An industry executive warned: “We have our arms shoved up behind our backs,” indicating pressure from the Treasury to comply. Critics argue that this could lead to lower returns for savers, with one stating: “How can we explain to savers we are putting money into assets which have been proven, over a period of time, to deliver a lower return?” The Chancellor aims to replicate the Canadian model to boost the UK economy and enhance returns for savers.

As the UK prepares for the ‘making tax digital’ (MTD) reforms set to commence in April 2026, many small business owners express significant concerns regarding the financial and operational implications. A survey by FreeAgent revealed that 10% of small business owners are unaware of the new rules, while 21% do not fully understand the requirements. Roan Lavery, CEO of FreeAgent, said: “Making tax digital is the biggest change for UK tax in more than one generation, but we know many small businesses are still apprehensive.” The Federation of Small Businesses (FSB) highlighted that a “sizeable minority” of firms remain unprepared, with rising compliance costs already averaging £4,500 annually.

Sir Geoffrey Clifton-Brown, the chairman of the public accounts committee, has described the UK tax system as a “lumbering dinosaur” that is losing taxpayer trust. A report from the committee revealed that the cost of tax collection rose by £563m in the last parliament, largely due to outdated communication methods, with 70% of correspondence still conducted via post. The reliance on legacy systems has hindered productivity, with compliance work yielding only £1.27m per staff member, down from £1.4m pre-pandemic. Clifton-Brown pointed to the need for HMRC to modernise its systems, saying: “It is time for HMRC to prioritise modernising its own systems so that it is fit to enter the second quarter of the 21st century.” The committee urged HMRC to learn from the Passport Office’s successful digital transformation.

Nick Mackenzie, the chief executive of Greene King, has urged the Government to “level the playing field” regarding business rates, as the recent tax rises in October’s budget are projected to cost the company nearly £50m annually. Mackenzie argues that the pub industry has been paying a “disproportionate amount of rates for many years” and called for collaboration with the Government to reform the system by 2026. Labour’s manifesto promises a “fairer system” with lower tax rates for certain properties. Greene King, which operates 2,600 pubs, is also grappling with rising employment costs, estimating an additional £24m due to increased national insurance contributions. Despite a revenue rise of 3.2% to £2.45bn, the company reported a statutory operating loss of £16.4m.

The Bank of England is facing criticism for its stringent regulations that could hinder London’s ambition to become a global hub for stablecoins. According to a report by Innovate Finance, the UK’s potential in the $200bn stablecoin market is jeopardised by the Bank’s holding limits and asset-backing requirements. The report states: “The Bank has tended to view stablecoins as a risk to stability,” which could prevent the UK from becoming a leading market for stablecoin trading. Innovate Finance advocates for the removal of deposit limits and the allowance of interest offerings to customers, suggesting that the Bank should adopt an innovation objective to foster new technologies in payments. The stablecoin market has seen significant growth, now valued at nearly $240bn, and is designed to mitigate volatility by being backed 1:1 with liquid assets.

Britain is set to regulate crypto exchanges and dealers for the first time, as Chancellor Rachel Reeves announces new draft laws aimed at the crypto-asset industry. The regulations will ensure that “crypto firms with UK customers will also have to meet clear standards on transparency, consumer protection, and operational resilience,” according to the Treasury. Currently, around 12% of British adults own or have owned cryptocurrencies, a significant increase from 4% in 2021. The draft rules would also see stablecoin issuers subject to regulation, but only if the issuers are based in the UK. Further discussions on crypto regulation are planned with US Treasury Secretary Scott Bessent in June. Nick Price, partner at Osborne Clarke in London, said the UK approach “appears more aligned with the US, bringing crypto assets into the existing regulatory perimeter rather than developing bespoke legislation for them”.

Dave Ramsden, a Deputy Governor at the Bank of England, has stressed the need for bold action on digitalisation to enhance the UK’s finance sector. Responding to criticism that the Bank’s prescriptive rules were stifling innovation, he called for authorities and the industry to seize “the opportunity to [use] new technology for the next generation of wholesale payments and settlements” adding it would “require bold and clear action”. Ramsden also pointed out the compelling economic case for modernising capital markets, citing potential operational efficiencies of 40% across bond life cycles.

US officials have divided trade negotiations into three phases, prioritising South Korea while placing the UK in either phase two or three. The shift complicates the UK’s efforts to secure a deal by their mid-May deadline, especially as they aim for an agreement with the EU around the same time. Anand Menon, director of UK in a Changing Europe, highlighted the conflict between US demands and EU alignment, stating: “If the Americans say you have to lift the regulations that restrict the access of our goods to your market, that is incompatible with what we need to do to sign a deal with the EU.”

The Bank of England’s Prudential Regulation Authority (PRA) is evaluating the implications of the dollar’s recent decline, which has been exacerbated by President Trump’s tariffs. Sam Woods, head of the PRA, noted: “This has created a bit of a dent… in the way the US is seen both by regulators and investors.” The dollar has experienced a significant drop of approximately 7.7% since April 2, marking its largest two-month decline in 23 years. Woods expressed concerns about the potential for a more fundamental decrease in demand for dollar-denominated assets and highlighted the importance of UK cooperation with the US, despite recent tensions possibly strengthening ties with European allies. The Bank of England maintains substantial dollar reserves to ensure financial stability and is closely monitoring market conditions.

The Office for National Statistics (ONS) has initiated an assessment of British Steel’s operational costs following its rescue by the Government, which may impact Chancellor Rachel Reeves’ fiscal targets. Professor Sir Ian Diamond, the UK’s top statistician, indicated that the ONS is evaluating whether British Steel should be classified as a public body with cost estimates provided towards the end of May.

The Labour party is reeling after Sir Tony Blair said limiting fossil fuel consumption as part of a net zero agenda was “doomed to fail” and the UK Government should focus less on renewables and more on technological solutions such as carbon capture. The former prime minister said it was wrong that people were “being asked to make financial sacrifices and changes in lifestyle when they know that their impact on global emissions is minimal”. Writing in the foreword to a new report from his think tank, the Tony Blair Institute, Sir Tony said: “Political leaders by and large know that the debate has become irrational. But they’re terrified of saying so for fear of being accused of being ‘climate deniers’.” The Guardian cites one Labour MP who said it was an unhelpful intervention that could be interpreted as a direct critique of Starmer and his energy secretary, Ed Miliband.

The Treasury Committee has urged the Government to enhance monitoring of cash acceptance, warning that failure to do so could lead to a two-tier society where vulnerable groups are excluded. The report highlights a significant decline in cash usage, dropping from 51% of all payments in 2013 to just 12% in 2023. The committee suggests that if cash acceptance continues to decline without adequate support for those reliant on it, the Treasury may need to mandate cash acceptance in the future.