The National Institute of Economic and Social Research (NIESR) has warned that the Treasury may face a budget deficit of more than £60bn, making the chances of further tax hikes more likely. The NIESR report also criticises the Government’s decision to increase employer National Insurance, labelling it as “damaging” and warning that it leaves the economy in a “risky and vulnerable position.” The research body also suggests that the recent increases in National Insurance and minimum wage may hinder hiring and not generate the anticipated tax revenue. The Chancellor’s fiscal targets are now at risk, the NIESR warns, having predicted a shortfall of £62.9bn due to a weaker economic outlook and lower tax receipts. The growth forecast for 2025 has been downgraded from 1.5% to 1.2%, while inflation is expected to average 3.3% for the year, up from a previous estimate of 2.4%.

HMRC data shows that a record 299,419 returns were filed in the first week of the new tax year. People filling out self-assessment forms can submit their tax return for the 2024/25 tax year between April 6 2025 and the deadline for online returns, January 31, 2026. HMRC said 57,815 early filers submitted their returns on the first day of the new tax year, compared to 67,870 a year earlier.

UK investors sold £1.2bn of bond fund holdings throughout April, according to analysis from Calastone. The analysis shows that investors opted instead for safe-haven money market funds, depositing £589m last month. This sell-off of bond funds came as Treasury yields spiked amid uncertainty over the fiscal ability of the US. The selling was focused on sovereign bond funds, which saw £621m of outflows. Edward Glyn, head of global markets at Calastone, said: “Bond markets have whipsawed as investors try to price the impact on the global economy of ever-changing US policy announcements on trade.” Charles Hall, head of research at Peel Hunt, notes that UK equity funds have seen just a single month of inflows in the last 47 months.

Andy Haldane, former chief economist at the Bank of England, says a Government call for regulators to cut red tape “has little chance of success” unless the mandates issued to regulators are changed. He has urged ministers to “provide air cover for regulators to accept more risk” by formally revising their regulatory mandates. Mr Haldane has also called for “a radical slimming of both the number of regulators and their rulebooks.”

The Financial Conduct Authority (FCA) is reforming the way it collects data from consumer credit providers in an effort to enhance clarity and efficiency. Since 2014, the FCA has mandated periodic regulatory returns from such firms, but inconsistencies have led to additional ad hoc requests. The new approach will feature tailored questions that reflect the specific business models of firms serving over 40m consumers, allowing the FCA to better support consumers and target areas of greatest harm.

Data for April shows that UK construction has seen output decline for four consecutive months. S&P Global’s construction PMI shows that civil engineering remained the weakest area of construction in April, while output in commercial construction decreased at the fastest pace in nearly five years. S&P Global’s economics director Tim Moore said construction businesses had “endured a bumpy ride” due to the weakness of the UK economy and “hesitancy among clients.” However, he noted that a slight improvement in business activity expectations for the year ahead served as an “encouraging development.”

LinkedIn has launched a new AI tool that it says will help match users with their ideal roles. The form says the tech will look beyond job titles and locations and “understands what you’re really looking for in your next role.” Rather than using filters, the tool enables users to describe what they are looking for. Zara Easton of LinkedIn said: “AI is changing the way we work, and job search on LinkedIn will completely change the way people find their next opportunity.”

The US central bank has kept interest rates unchanged, despite President Donald Trump calling for borrowing costs to be lowered. In announcing that rates would be held at 4.25%-4.5%, chairman Jerome Powell warned that new tariffs put in place by Mr Trump have created “so much uncertainty” that the Federal Reserve is unsure what to do about interest rates. He added that if the tariff policies remain in place they are likely to “generate a rise in inflation, a slowdown in economic growth, and a rise in unemployment.”

An AI avatar of Simon Philips, the chief executive of AIM-listed car part company CT Automotive, has delivered the company’s full-year results in a first for the London Stock Exchange.