According to the latest Business Prosperity Report from Barclays, 79% of UK businesses are concerned about tariffs and global trade uncertainty, prompting many to take pre-emptive measures. The survey of 1,000 firms revealed that 48% have altered their US operations or supply chains to mitigate potential impacts. Additionally, 72% of firms reported that hiring skilled labour is hindering growth, highlighting the importance of productivity gains to offset rising costs. Despite the challenges, 86% of firms remain optimistic about their prosperity over the next three to five years.

Office for National Statistics data shows takeovers of British firms hit the highest level in almost three years in Q1, with inward M&A deals exceeding £19bn in Q1. This was almost four times the total seen across Q4 2024. While the value of deals was up, the number of inward deals was lower than in all quarters of 2024. Emma Danks of Taylor Wessing commented: “While deal volume may have slowed down this quarter, the fundamentals remain strong, with deal values reaching the highest levels seen since late 2022.” The data also reveals that the value of UK companies acquiring foreign businesses came in at £9.4bn.

JPMorgan is set to enhance its investment offerings in the UK following research indicating significant dissatisfaction among retail investors. The lender discovered that nearly one in six UK investors are unhappy with their investment income, despite two-thirds valuing it highly. To address this, JPMorgan will utilise its asset management division and digital wealth manager Nutmeg to introduce risk-rated income investing portfolios tailored to individual risk appetites. These portfolios will feature five options designed for varying risk levels and investment timeframes. Additionally, the firm plans to adapt its US exchange-traded funds for UK investors, providing a diverse range of income-generating investments.

Chancellor Rachel Reeves is expected to implement significant tax increases in her upcoming Budget, potentially breaking Labour’s manifesto pledge not to raise income tax, National Insurance, or VAT. Stephen Millard, acting director at the National Institute of Economic and Social Research, believes that it is “pretty much inevitable” that one of these taxes will rise. With her fiscal headroom of £9.9bn diminished, Ms Reeves may target income tax by extending the current freeze on thresholds, which could drag millions into higher tax bands. The Institute for Fiscal Studies estimates that this freeze will push 4m people into paying more income tax by 2028. Allan Monks, chief UK economist at JPMorgan, believes the freeze in thresholds will be extended to 2030.

Deutsche Bank analysts expect Chancellor Rachel Reeves to increase taxes by at least £10bn in the Budget, saying that they “expect fiscal news to worsen over the coming months.” Warning over the impact of rising inflation and increased spending, the analysts added: “By the time the Autumn Budget rolls around, the Chancellor’s fiscal headroom will have likely evaporated.” Deutsche Bank expects inflation to average 3.3% in 2025, up from a previous forecast of 2.8% made in November. The bank also said it expects the Bank of England to cut interest rates three times this year – in August, November and December – leaving rates at 3.5% by the end of the year.

The Organisation for Economic Co-operation and Development (OECD) has warned that the Chancellor’s “very thin” fiscal headroom poses a risk to the UK economy. The OECD has urged the Government to “step up” efforts to “rebuild” its fiscal buffers, saying that “strengthening the public finances remains a priority.” The OECD has downgraded its estimate for UK growth in 2025 to 1.3% from 1.4%, while its forecast for 2026 has been trimmed from 1.2% to 1%. Despite the downgrade, the UK’s growth would remain the second fastest-growing economy in the G7 across 2025 and 2026 after the US.

Andrew Bailey, governor of the Bank of England, says the pace of UK interest rate cuts is “shrouded in a lot more uncertainty” due to an “unpredictable” global economy. Mr Bailey told MPs on the Treasury Committee that it is unclear where interest rates will go, saying: “I think the path remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty, frankly.” Mr Bailey, appearing alongside members of the Bank’s Monetary Policy Committee, said a “gradual and careful” approach to rate-cutting remains his “guiding light.”

Hospitality workers are the worst-paid employees in the UK, according to analysis from price comparison site money.co.uk. Accommodation and food service jobs are, on average, paid £12.39 per hour, coming in below the typical pay in the wholesale and retail trade (£13.11 per hour), and arts roles (£13.38 per hour).

Deloitte, EY, and PwC are reportedly developing a new audit system for AI tools, with the Big Four firms all preparing to launch AI assurance services. Deloitte audit partner Richard Tedder said AI assurance was “critical” to adoption of the technology, with business requiring assurance over the AI they use. Pragasen Morgan of EY said firms “are still quite a way away” from being able to give complete assurance over an AI model. It is noted that a recent poll by KPMG found that just 42% of people trust AI, while nearly three-quarters have had no formal training in the technology.

The amount of money needed to meet a basic standard of living in retirement has fallen, according to the Pensions and Lifetime Savings Association, with lower energy prices having an impact. The study suggests that the cost of a minimum retirement living standard for a one-person household has decreased by £1,000 a year to £13,400. A two-person household now needs an annual income of £21,600, down from £22,400 a year ago. For a ‘moderate’ lifestyle, a single person would need £31,700, up from £31,300, while two people would need £43,900, compared to £43,100. For a ‘comfortable’ retirement, a single person would need £43,900, up from £43,100 previously, and a two-person household would need £60,600, compared to £59,000 last year.