The Government has pledged £86bn in research and development (R&D) funding over the next four years to drive innovation in areas such as medicine, AI, and green technology. The investment matches a previous Conservative commitment of £22bn annually and includes £500m for regional authorities to support local industries, with at least £30m allocated to each of England’s seven mayoral strategic authorities. Ministers highlighted targeted support for life sciences in Liverpool, defence in Northern Ireland, and semiconductors in south Wales. Additional funding includes £4.8m for a Manchester-Cambridge partnership aimed at attracting business investment. The announcement precedes this week’s spending review, where Chancellor Rachel Reeves is also expected to reform Treasury investment rules seen as favouring London and the south-east.

Oliver Kamm in the Times comments on Labour’s proposal to allow regulators to compel workplace schemes to invest more in UK assets. However, critics argue that this approach could undermine the performance of pension funds, as it may increase liquidity risk and transaction costs for savers. The potential for government influence over fund managers also raises concerns about the long-term implications for retirement incomes. Elsewhere, City AM reports on plans to allow companies to extract surplus cash from final salary pension schemes, which the Department for Work and Pensions warned could put retirement schemes at risk. The Pension Security Alliance echoed the concerns, adding: “Pension schemes are not a piggy-bank that politicians can dip into or a cash-cow for employers.”

Scotland attracted 11 financial services foreign direct investment (FDI) projects last year, marking the highest number in a decade and an increase from nine in 2023. The upcoming EY Scotland Attractiveness Survey 2025 highlights Edinburgh and Manchester as joint top cities outside London, with Edinburgh securing six projects and Glasgow four. The US remains Scotland’s leading source of FDI, contributing five projects this year. Despite a decline in total UK financial services FDI from 108 to 73 projects, Scotland’s performance stands out. The sector aims to grow its economic contribution by £4-7bn over the next five years, according to Sandy Begbie, CEO of Scottish Financial Enterprise.

Analysis by the Confederation of British Industry (CBI) shows the changes to business property relief (BPR) announced in the Chancellor’s October Budget will reduce growth in Labour seats by over £24m over the next five years. In Conservative seats the losses will stand at £20m and in Reform constituencies £18.5m. Seats held by the Green Party can look forward to an average gross value added (GVA) loss of around £40m, indicating that cities and urban centres will be worst hit by the change. The Prime Minister’s seat of Holborn and St Pancras will be the fourth-worst hit constituency in the country with 1,037 jobs expected to be lost. Overall, the analysis shows that £14.9bn in GVA losses can be expected nationwide.

As the government spending review approaches, pottery industry leaders express deep concern over rising energy and employment costs. The ceramics sector has faced significant decline, with three Stoke-on-Trent manufacturers collapsing in 2025 alone due to soaring energy bills. Emily Johnson, co-owner of 1882 Ltd, stressed that without assistance, the future of the industry is at risk, stating: “We don’t need lip service, we need help.” Rob Flello, chief executive of Ceramics UK, echoed this sentiment, urging the Government to alleviate burdensome taxes and levies. The industry, characterised by an ageing workforce and dwindling skilled artisans, is at a critical juncture, with calls for immediate action to ensure its survival.

Britain is facing potential tax increases of up to £30bn in the upcoming autumn Budget to support rising defence expenditures, economists have warned. Rachel Reeves, the Chancellor, is under pressure to fulfil commitments to boost defence spending to 3% of GDP by the end of the next parliament, amidst expectations from NATO for even higher contributions. Michael Saunders from Oxford Economics said the Chancellor might have to reconsider her previous pledges against raising income tax, National Insurance, or VAT. With a narrow fiscal margin of £9.9bn, Ms Reeves is also contending with additional costs from restoring winter fuel payments and reviewing the two-child benefit cap, all while facing potential downgrades in economic growth. Separately, Reeves declined to rule out increasing taxes whilst attending a meeting of business leaders at the Confederation of British Industry annual dinner on Thursday. Pressed four times by CBI president Rupert Soames to reassure Britons they would not be subject to higher taxes, Ms Reeves could only commit to avoiding a repeat of the record £40bn tax raid she launched last autumn.

A report from Irwin Mitchell highlights the alarming rise in inheritance tax (IHT) liabilities across the UK, predicting a 50% increase in estates affected by 2030. Andrea Jones, head of Irwin Mitchell’s Private Client Advisory, said: “It shows that IHT is no longer just a concern for wealthy families – it’s becoming a reality for middle-income households across the UK.” The report reveals that cities like Hull and Carlisle, once considered affordable, are now becoming IHT hotspots due to rising property values and frozen tax thresholds. By 2027, the Treasury is expected to collect £9bn annually from IHT, up from £5.5bn in 2021/22. Key findings indicate that nine in ten postcode areas will see increases in taxable estates, with significant rises expected in Greater London and other major cities.

Michael Lohan, chief executive of IDA Ireland, has urged the European Union to reconsider its plans for a minimum 15% corporate tax on multinational companies amid tariff negotiations with the US. Lohan stated that it is “inevitable” that EU taxes on US firms will be part of discussions with the Trump administration, which has threatened “revenge taxes” on countries perceived to be targeting US businesses unfairly. He suggested that Brussels should be open to an “adjustment” to ensure that the global agreement includes major trading partners, stating: “If we have a global agreement, it needs to have the largest parties and trading partners to be part of it.”

A UK special investigations team at HMRC has significantly increased its tax collection from wealthy individuals, netting over £1.5bn in the 2023-24 tax year, a substantial rise from the previous year.

The Government is considering dropping two proposals that would have made it more difficult for private equity executives to qualify for an effective tax rate of 34.1% on carried interest.

The Financial Conduct Authority (FCA) is considering lifting its ban on crypto exchange traded notes (cETNs) for retail investors. The move reflects the FCA’s shift towards a lighter regulatory approach amid pressure from the Government to stimulate economic growth. Previously, cETNs were only available to professional investors, with the FCA stating they were “ill-suited for retail consumers due to the harm they pose.” David Geale, the FCA’s executive director of payments and digital assets, said the proposals reflect its “commitment to supporting the growth and competitiveness of the UK’s crypto industry.”

Baroness Helena Morrissey, founder of the 30 Per Cent Club, is advocating for a re-evaluation of diversity, equity, and inclusion (DEI) strategies. She suggests that the focus should shift to “inclusion” as a priority, stating: “Diversity is being invited to the dance, and inclusion is when you actually get asked to join in.” This week, she will present new research in the House of Lords, commissioned by the Diversity Project, which examines “cognitive” diversity beyond demographic factors. Conducted by Alex Edmans, professor of finance at London Business School, the research indicates that while demographic diversity alone does not enhance decision-making, cognitive diversity can, if managed effectively. Morrissey aims to unify differing perspectives on DEI, stressing the need for businesses to create environments that foster diverse viewpoints and effective decision-making.

Recent economic data indicates a slowdown in wage growth and a rise in unemployment. The Office for National Statistics is expected to report that wage growth, excluding bonuses, fell to 5.4% in the three months to April, while unemployment is projected to increase to 4.6%. Ruth Gregory, Deputy Chief UK Economist at Capital Economics, anticipates wages will eventually align with the 2% inflation target. Meanwhile, concerns about the accuracy of labour market data persist, particularly following an overstatement of April’s inflation estimate. Additionally, analysts predict ONS figures will show a 0.2% contraction in the economy for April, driven by weak industrial production. Finally, research by BDO shows a rebound in business output and confidence in May, although this was driven almost entirely by the services sector.

According to a new report by the British Retail Consortium, cost pressures in the UK retail sector could lead to one in ten jobs being at risk by 2028. Since 2015, over 350,000 retail jobs have already been lost, a decline significantly larger than that in the steel industry. Helen Dickinson, BRC boss, said: “While factory closures are met by promises of action, the wave of retail jobs losses has been met with indifference from policymakers.” The report highlights that changes to Employer’s National Insurance and increases in the National Living Wage have added £5.1bn to the industry’s costs.

Rachel Reeves’s plans to utilise £160bn in pension surpluses to stimulate the UK economy are in doubt after a report from the Department for Work and Pensions (DWP) indicated that only about £11bn will be available for investment, as businesses are likely to use surpluses to offload pension liabilities to insurance companies. The DWP said: “It is estimated that an additional £11.2bn surplus will be extracted as a result of the preferred option to legislate over a 10-year period.” Despite the Chancellor’s earlier claims that 75% of final salary schemes were in surplus, the reality is that many companies are opting for full buyouts. Concerns have also been raised about the potential risks to member security if surplus funds are accessed without adequate safeguards. The Chancellor, who is desperate to raise tax revenues, would benefit because any surpluses released are taxed at 25%.

The debate surrounding generational inequality in Britain has intensified, with baby boomers (born 1946-1965) often blamed for hoarding wealth while younger generations, including millennials and Gen Z, struggle with high rents and stagnant wages. A report by the House of Commons’ Women and Equalities Committee highlighted “clear evidence” of ageist stereotyping in media narratives, which pit older and younger generations against each other. Simon Pittaway, a senior economist at the Resolution Foundation, noted: “There’s an extremely strong life-cycle component to wealth,” indicating that wealth accumulation is a natural progression over a lifetime. However, some boomers, like John Griffiths, argue that they are unfairly targeted for their financial success, remarking: “It’s a gimmick in the financial media to blame the boomers.” The conversation continues as younger generations seek to address the wealth gap and the challenges they face in today’s economy.

Reform has launched a fierce critique of the Bank of England, accusing it of squandering tens of billions of taxpayers’ money through its money-printing programme. Richard Tice, the party’s deputy leader, stated that the Bank prioritises bank profits over the welfare of working people, pledging to halt interest payments to commercial lenders. In a letter to Andrew Bailey, the Governor of the Bank, Tice described the Bank’s actions as a “systemic misuse of taxpayers’ money.” Reform claims it could save £35bn annually by eliminating interest on central bank reserves, which were created during the £895bn quantitative easing programme. Tice warned that the current quantitative tightening is increasing borrowing costs and straining public finances. The Office for Budget Responsibility estimates a cumulative loss to taxpayers of £133.7bn, exceeding the annual education budget.

Tina McKenzie from the Federation of Small Businesses (FSB) has urged the Government to allow small businesses to reclaim statutory sick pay for ill workers. The request comes ahead of the Chancellor’s spending review. Currently, employees can receive £118.75 per week for up to 28 weeks, but the FSB highlights that 75% of small employers are worried about the financial impact of expanded eligibility. McKenzie said: “There’s no use glossing over the reality – every pound in this spending review has to work twice as hard with public finances under strain and business confidence low.”