Rachel Reeves has been cautioned that tax increases are “paralysing” British businesses, with one in three companies cutting jobs due to the £25bn National Insurance hike. Shevaun Haviland, head of the British Chambers of Commerce, urges the Chancellor not to raise taxes further, stating: “The Government needs to use the tax system to incentivise growth, not kill it.” A survey revealed that many businesses are rethinking growth plans due to the unexpected burden of increased National Insurance contributions. Eamonn Ives from the Entrepreneurs Network expressed concern over the lack of understanding from the Government regarding entrepreneurs’ needs. Finally, the Weil European Distress Index highlights that UK businesses are facing significant distress, with rising costs and falling confidence pushing firms to their limits.

As the wealthy flee high-tax UK experts predict that the Labour Government could introduce an exit tax, as countries such as Germany, Norway and Belgium have done. A report by Henley & Partners predicted that a net 16,500 millionaires will leave Britain this year, up from 10,800 in 2024. Chris Etherington of RSM said previous governments have not been concerned about the number of businesses and wealthy individuals leaving the country. However, if the Chancellor raises capital gains tax further, prompting even more people to leave, the pressure on Rachel Reeves to implement an exit tax would increase.

Edward Matthews, CEO of Mera Investment Management, says reversing Labour’s extension of inheritance tax (IHT) on global assets could lead to the revival of London’s prime property market. He argues that a pragmatic tax reversal would signal that the UK is “once again open for business,” essential for reclaiming its status as a global safe haven. The market may bounce back if the UK fosters a stable fiscal environment prioritising long-term investment.

According to the Resolution Foundation, household incomes are projected to increase by a mere £300 by the end of the decade, with a “bleak” outlook driven by rising taxes and higher energy costs. The think tank forecasts a 1% growth in average household incomes from 2025 to 2030, while the poorest families may see a 1% decline in living standards. Adam Corlett, principal economist at the Resolution Foundation, said that the Government could improve living standards with “the right policy interventions,” such as lifting the two-child benefits cap. The report highlights that pensioners will benefit the most, with an expected income increase of £1,500 or 5%. However, the lowest-income households are projected to be 4% worse off by the decade’s end, exacerbated by rising costs and frozen benefits.

The latest British Social Attitudes study reveals that 26% of people are struggling to live on their current income, a significant increase from 16% before the pandemic. Professor Sir John Curtice from the National Centre for Social Research noted that voters are sceptical about Labour’s proposed solutions, however: “Rather than turning their back on the state, for the most part, the public are still inclined to look to government to provide solutions.” With inflation currently at 3.4% and food prices rising by 4.4%, many are feeling the pinch. Only 35% of the population now report living comfortably, a stark decline from 50% in 2018. The report highlights the growing discontent with high taxes and perceived poor value from public services, particularly the NHS.

Recent data from Indeed reveals that graduate jobs in the UK have reached their “weakest level since at least 2018,” with postings down 12% compared to last June. The decline follows Chancellor Reeves’ £20bn increase in national insurance contributions, which has led employers to hesitate in hiring junior workers. The UK is now the only developed nation with job postings remaining below pre-pandemic levels, approximately 21% lower than in February 2020. Jack Kennedy, senior economist at Indeed, noted that while the labour market is “holding out overall,” new graduates are facing significant challenges in securing employment. The analysis also highlights a decrease in job postings for HR, marketing, and media, alongside a reduction in work-from-home opportunities.

Energy Secretary Ed Miliband has announced government support for banks and large companies in developing climate transition plans. Speaking at the Climate and Innovation Forum, he stated the Government is “determined to make the UK the sustainable finance capital of the world.” Transition planning involves creating a roadmap for businesses to align their operations with climate goals, which is crucial for attracting investment. The Government aims to stimulate billions of pounds in private investment in net zero sectors, with plans to publish consultations on transition planning and sustainability reporting standards.

Sir Keir Starmer has introduced the UK’s first trade strategy in over 30 years. The strategy will unlock £5bn for businesses and increase UK export finance capacity to £80bn, as part of the Government’s Plan for Change. Starmer stated: “What works for business, works for Britain,” pointing to the importance of trade deals with the US, India, and the EU. The strategy also aims to enhance the UK’s status as a services superpower and improve access to global markets. The UK is also set to join the Multi-Party Interim Appeal Arbitration Arrangement, reinforcing its commitment to a rules-based trading system.

UK motor insurers are projected to break even this year but are expected to incur losses in 2026, according to analysts at EY. They predict that heightened competition and rising claims inflation will hinder profitability, with a net combined ratio of 100% in 2025 and 107% in 2026. EY anticipates a 6% drop in premiums in 2025, followed by a 5% increase in 2026, translating to a £10 saving for motorists over two years. Dan Beard, UK insurance partner at EY, said: “Following just one year of underwriting profitability in the last three, UK motor insurers are once again bracing for challenge in an increasingly uncertain market.”

UK wealth managers including RBC Wealth Management, Evelyn Partners and Quilter Cheviot are set to offer private market products to retail clients, addressing dwindling public market relevance and expanding access to private investments.