The latest jobs figures indicate a troubling trend in the UK labour market, with the unemployment rate rising to 4.5% between January and March, the highest level in nearly four years. The increase is attributed to Labour’s rise in employers’ National Insurance contributions, leading to a reduction in hiring and a drop in vacancies. Average weekly earnings, excluding bonuses, grew by 5.6% in early 2024, but this is a decline from previous months. ONS director of economic statistics Liz McKeown said: “Wage growth slowed slightly in the latest period but remains relatively strong, with public and private sectors now showing little difference. The broader picture continues to be of the labour market cooling, with the number of employees on payroll falling in the first quarter of the year. The number of job vacancies has also fallen again, with the rate of decline increasing in the last few months.”

Recent data reveals that 1.17m people in the UK are currently on zero-hours contracts, marking a 12% increase over the past year, despite Labour’s commitment to abolish these “exploitative” arrangements. Rebecca Florisson, an analyst at the Work Foundation, said: “The [Employment Rights] law is likely to be passed later this year, and we had expected to see the start of a long-term decline of zero-hour contracts in the UK.” However, the opposite trend has emerged, with many workers trapped in unstable jobs, often trading security for flexibility. The Employment Rights Bill aims to ban zero-hours contracts without work offers and establish guaranteed hours based on a twelve-week period. Yet, implementation is not expected until late 2026, leaving many workers in precarious positions.

Rolly van Rappard, co-founder of CVC Capital, is contemplating a move from London to Milan due to recent tax reforms in the UK. Reports indicate that changes to the “non-dom” regime and inheritance tax rules are prompting high-net-worth individuals to reconsider their residency. Van Rappard, whose net worth is estimated at $1.5bn, is not alone; Richard Gnodde of Goldman Sachs and steel magnate Lakshmi Mittal have also expressed concerns over the UK’s tax landscape. The Italian government has been actively courting wealthy expatriates with tax incentives, including a scheme allowing tax breaks on overseas earnings for up to 15 years.

The US has cautioned Sir Keir Starmer regarding his proposed tax changes that could jeopardise British farmers and national security. Brooke Rollins, the US agriculture secretary, described the Government’s plan to limit Agricultural Property Relief as a “problem”. She said: “You cannot have true national security without food security,” stressing the importance of supporting farmers. Currently, most commercial farmers enjoy full exemption from inheritance tax due to agricultural property relief, but from April 2026, this relief will be capped at £1m. The Treasury claims that this change will impact 500 estates annually, although this data has faced scrutiny.

The City minister is actively encouraging leading financial technology companies, including Clearscore, Monzo, OakNorth, and Revolut, to consider a London listing. Emma Reynolds, economic secretary to the Treasury, met executives from these businesses to discuss the benefits of going public, particularly as Monzo prepares for an initial public offering (IPO) that could value it at £7bn. The CEO of the London Stock Exchange Dame Julia Hoggett and Simon Walls, an executive at the Financial Conduct Authority, also joined the meeting. The London Stock Exchange (LSE) is keen to attract new listings, especially after recent takeover bids for tech firms like Deliveroo and Darktrace. Reynolds said: “We are determined to make Britain the best place in the world to start up, scale up and list,” highlighting the Government’s commitment to supporting innovative companies. While Monzo favours London for its IPO, Revolut, valued at $45bn, is more likely to list in New York in the future.

The Daily Telegraph reports that Reform UK’s gains in the recent local elections have handed the party influence over more than £100bn in council pension assets. With control of 10 councils, Reform councillors will sit on committees managing the Local Government Pension Scheme (LGPS), which serves 6.7m members. Around half of LGPS funds currently back net zero targets, investing in low-carbon and ESG initiatives. Reform leaders Nigel Farage and Richard Tice reportedly oppose these strategies. Mr Farage said he wanted pension fund managers to prioritise maximising return on investments instead, explaining: “We want the money invested for growth not for political posturing.” Mr Tice added that the party would “be looking closely” at the scheme’s investment in net zero.

The Financial Conduct Authority (FCA) is set to simplify the UK’s insurance regulations to enhance competitiveness and reduce costs for firms. The regulator plans to eliminate “outdated or duplicated” requirements, allowing companies greater flexibility in product reviews and training requirements. Matt Brewis, director of insurance at the FCA, said: “We are stripping back our insurance rule book by removing ineffective, outdated or duplicated regulation.” The proposed changes aim to support lower costs and wider access for businesses and consumers while maintaining essential protections for smaller customers. The FCA is also looking to define large commercial insurance customers who should not be subject to its conduct rules. Feedback on these proposals is invited by July 2, 2025.

Monzo has introduced an innovative “Undo Payments” feature, allowing its 12m customers to cancel bank transfers within a customisable window of 10 to 60 seconds. The feature aims to address the common issue of accidental payments, with research indicating that nearly one in three Brits have sent money to the wrong person or amount in the past year.

Huw Pill, Chief Economist at the Bank of England, said on Tuesday that that interest rates may need to remain elevated longer than anticipated due to persistent inflation. Pill stated that inflation could remain “too high for the BoE’s 2% target,” suggesting that “the response of monetary policy…needs to be somewhat more aggressive or more persistent.”

At the Saudi-U.S. Investment Forum, BlackRock CEO Larry Fink highlighted that approximately $23trn is currently held in cash by investors due to ongoing uncertainties surrounding the U.S. economy and its deficits. He stated: “When there is uncertainty, you are going to keep more and more money in cash,” reflecting the cautious sentiment among global investors. Despite the volatility, Fink noted that many investors remain overweight on U.S. assets, although there is a growing interest in markets like Europe, the Gulf region, India, and Japan.