Corporate leaders have questioned plans to make businesses tell workers what their colleagues earn. With ministers looking at ways to end pay discrimination as part of an overhaul of equality policies, business groups have voiced concern over proposals that would make companies publish remuneration structures and list salary brackets on job adverts. Alex Hall-Chen, principal policy adviser for employment at the Institute of Directors, said some of the proposed measures “would only serve to complicate the recruitment processes,” and make it harder for firms to “fairly reward performance and experience.” Warning that there is “a world of difference between a big business and a small one,” Tina McKenzie, policy chair at the Federation of Small Businesses, said: “This is a clear case where it would be excessive for government to impose detailed regulatory rules on small employers who simply don’t have HR departments.” Charles Cotton, policy and reward adviser at HR industry body the CIPD, warned that employers “might face potential equal pay issues if it emerges an employee is being paid a higher salary than an employee of a different sex who’s doing the same job or a job of equal value.”

Office for National Statistics (ONS) data shows that inflation fell in May, hitting 3.4% after climbing to 3.5% in April. Despite the slight decline, inflation remains well above the Bank of England’s 2% target. Experts say May’s data means the Monetary Policy Committee (MPC) will opt to keep interest rates at 4.25%. Ruth Gregory, deputy chief UK economist at Capital Economics, said the inflation data “perhaps provides a tentative sign that firms are passing on more of April’s rise in National Insurance contributions in their selling prices.” The Office for National Statistics said its measure of core inflation, which excludes volatile items such as energy, food and alcohol, rose by 3.5% year-on-year, with this down from 3.8%. Monica George Michail, an associate economist at the National Institute of Economic and Social Research, said inflation is likely to remain above 3% for the rest of the year due to the “inflationary effects from higher government spending.” Yael Selfin, chief economist at KPMG UK, suggested that rate setters are unlikely to shift from their “cautious approach” at June’s MPC meeting.

Tim Focas, head of capital markets at Aspectus Group, argues that the City of London is experiencing a significant crisis of confidence and capital, reminiscent of the challenges faced 50 years ago. The “Big Bang” deregulation of 1986 transformed London into a global financial centre, but now listings are dwindling, with London only accounting for 0.5% of global IPO activity in 2022. Mr Focas criticises policymakers for their cautious approach, adding a call for an overhaul of corporate governance codes “that have gone from protecting investors to smothering boards in box-ticking compliance.” He advocates for radical reforms, including urgent tax incentives for UK listings and a “serious rethink of capital gains treatment on long-term equity investment.” Mr Focas says that without bold reform, London risks losing its global influence.

Chancellor Rachel Reeves’ decision to hike taxes on employment has significantly impacted business investment, leading to the lowest investment plans in five years, according to the Confederation of British Industry (CBI). The CBI forecasts UK economic growth at just 1.2% for this year and 1% in 2026. The report indicates that business investment is expected to slow in the third quarter and potentially drop at the start of next year. The CBI report highlights the need for a comprehensive skills strategy and targeted investment to stimulate growth, as the current tax pressures threaten to stifle household consumption and overall economic recovery.

Chancellor Rachel Reeves is considering a significant tax increase of up to £20bn in the Budget, with potential changes to the 39% tax rate on dividends and the abolition of a £500 allowance. Such moves could deter investment, as higher dividend taxes may lead to a “rethink” on remuneration strategies, according to Claire Trott from St James’ Place. Additionally, experts say the proposed tax changes could complicate the UK tax regime and push investors towards tax-free ISAs. Meanwhile, Deputy Prime Minister Angela Rayner has suggested increasing the tax surcharge on lenders, which could raise £700m, but UK Finance chief executive David Postings cautioned that this would make UK banks less competitive.

Simon Clarke, director of think-tank Onward, highlights the challenges facing the UK economy. He argues that Labour’s approach of increasing taxes and spending could lead to a “low-growth, high-tax future.” Pointing to a significant increase in borrowing, he emphasises the need for a pro-growth agenda that supports entrepreneurship and innovation, rather than merely expanding the state. Mr Clarke says a “doom loop is now well underway,” with tax, borrowing, the cost of borrowing, unemployment and inflation “all going up, while growth is going down.” He adds: “In the face of this, Labour’s instinct is to tax more, spend more and centralise more.”

The Treasury Committee has called for clarity over the National Wealth Fund, a new Government body designed as a rebrand of the UK Infrastructure Bank. The committee asked academics whether the name was a “good description of what this new entity is meant to do.” Pranesh Narayanan, research fellow at the Institute for Public Policy Research, said the name was a “slight misnomer” as the body is “closer to a sovereign investment fund or development bank than a sovereign wealth fund.” Neil Lee, professor of economic geography at London School of Economics, and Chaitanya Kumar, head of economic policy at the New Economics Foundation, said they would have opted for a different name.

Technology is changing the shape of the working day, according to Microsoft’s latest work trend index, with advances in AI and connectivity meaning the traditional 9 to 5 may soon be a thing of the past. The study suggests that working hours are extending into early mornings, late nights, and weekends, creating the “infinite workday.” The analysis found that 40% of workers are checking emails before 6am, while almost a third remain online at 10pm. It was also shown that users of Microsoft 365 receive 117 emails and 153 chat messages each day, with this up 6% on a year ago.