The UK Government is poised to implement significant reforms to the pensions system. The proposed Pension Schemes Bill aims to enhance pension wealth and investment, with a focus on six key areas, including a reserve power for regulators to force some defined contribution workplace schemes to back more British assets and a mechanism for merging smaller pension pots. Liz Kendall, Work and Pensions Secretary, said the reforms are designed to “secure better value for savers’ pensions and drive long-term investment in British businesses.” The bill also seeks to improve transparency in pension scheme performance and address the issue of dormant small pots. Nausicaa Delfas, chief executive of The Pensions Regulator, described the bill as a “once in a generation” opportunity to enhance the UK pension system. But industry is sceptical, with the Pensions and Lifetime Savings Association saying: “The introduction of a reserve power to allow government to direct how defined contribution schemes invest will require very close scrutiny.” Pensions consultant and former pensions minister Sir Steve Webb also warned about handing the state power over investments: “[Ministers] have put in the statute book a power that someone else can pick up… nobody should have this power…it creates instability and uncertainty for pension schemes.”

The Chancellor, Rachel Reeves, is under fire for proposed tax changes that could lead to a £15bn loss in economic activity and the potential loss of over 200,000 jobs. A report by CBI Economics highlights the adverse effects of alterations to Business Property Relief (BPR) and Agricultural Property Relief (APR) on family-owned businesses. Steven Mulholland, CEO of the Construction Plant-hire Association, stated: “This report clearly demonstrates the damage that changes to Business Property Relief will inflict on family-run businesses.” The changes, effective from April 2026, will limit 100% relief from inheritance tax (IHT) to assets worth £1m, with a reduced rate of 50% applied above this threshold. Neil Davy, CEO of Family Businesses UK, warned that these changes would not only decrease tax receipts but also hinder economic growth, stating: “No industry, sector, region or constituency will be immune from these effects.” Meanwhile, the Telegraph reports that business owners and farmers are starting to take out life assurance policies for the purpose of inheritance tax. Alan Richardson, of LifeSearch, said: “Before the Budget was announced, we never got a business or a farm owner phoning us up to talk about inheritance tax liabilities, but we do get that now.” Sales of whole life cover have increased by 230% since last autumn, the broker revealed.

Recent research by the Institute of Directors (IoD) reveals that 72% of business leaders believe the Government’s workers’ rights overhaul will hinder economic growth and lead to fewer hires. The poll indicates that over half of respondents foresee a “strong negative impact” on the economy. Concerns centre on changes to statutory sick pay and new rights for employees from day one, which could result in increased costs and legal challenges for businesses. Alex Hall-Chen, the IoD’s principal policy advisor for employment, stated that the bill is “significantly damaging business hiring intentions and confidence in the UK economy.” The survey also found that nearly half of the firms plan to reduce hiring, with a third considering outsourcing jobs abroad. Despite these concerns, over half of directors indicated they would invest more in automation to enhance productivity.

The Financial Conduct Authority (FCA) has initiated a “global week of action” to combat illegal promotions by rogue finfluencers, collaborating with enforcement agencies in Canada, Hong Kong, and Italy. This initiative has led to three arrests and additional criminal proceedings against individuals promoting unauthorised financial schemes. The FCA has also issued 50 warning alerts, which “will result in over 650 take-down requests on social media platforms.” This concerted effort aims to protect social media users from misleading financial advice and ensure compliance within the industry.

The European Central Bank (ECB) has reduced its main interest rate to 2%, the lowest since 2022, amid concerns over inflation and economic growth due to President Trump’s tariff threats. The governing council’s decision to cut the eurozone’s deposit rate by 0.25 percentage points marks the eighth reduction since June last year. Christine Lagarde, the ECB president, stated that the current monetary policy is in a “good place” but warned of the uncertain inflation path due to global trade volatility. Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, noted that the ECB’s future decisions will hinge on upcoming trade negotiations between the EU and the US. Jack Allen-Reynolds from Capital Economics anticipates one more rate cut in September, with expectations for the Bank of England’s base rate to reach 4% by year-end.

Wise, the fintech founded by Kristo Kaarmann and Taavet Hinrikus, has announced plans to dual list, with a primary listing in New York and a secondary listing in London. Kaarmann said that although policy makers in the UK were moving in the right direction more time would be needed for reforms to improve the London market. The move has raised concerns among City brokers, with Charles Hall from Peel Hunt saying: “Losing Wise, which was founded in London, scaled in London and floated in London, is a hammer blow for the UK. Wise has rejected being a leading tech company in the FTSE 100 in favour of being a small company in the US.”

The Foreign Secretary, David Lammy, has stressed the need for collaboration between the Big Four audit firms and the Government as artificial intelligence (AI) gains prominence in business. During a meeting with top firms like PwC, KPMG, EY, and Deloitte, Lammy said: “Technology is the frontline of geopolitics. We are in a hyper-competitive race between nations – and companies – to reap the advantages of tools like AI.” The Foreign Office’s strategy aims to secure trade deals and enhance the UK’s competitive edge in technology. With the International Monetary Fund estimating that AI could increase productivity by 1.5% annually, the potential economic benefit for the UK could reach £47bn each year over a decade. Lammy has prioritised establishing partnerships between businesses and the Foreign Office to leverage AI for diplomatic and economic growth.

Angela Rayner, the Deputy Prime Minister, has experienced a significant increase in popularity among Labour members, with her favourability rating rising to +71, up from +46 two months ago. The surge follows the leak of her memo advocating for tax increases, which has resonated with members amid dissatisfaction over welfare and public spending cuts. The memo suggested raising £3bn annually through various tax measures, including increasing corporation tax on banks.