According to Deloitte’s latest survey of chief financial officers, Britain has surpassed the United States and Japan as he most attractive investment destination. The survey, which included responses from 61 of the UK’s largest companies, revealed that 13% of executives consider the UK very or somewhat attractive for investment. “These results reveal a shift in sentiment”, Richard Houston, senior partner and chief executive of Deloitte UK, said. “This renewed confidence, coupled with a rise in risk appetite…underscores the considerable investment potential the UK offers.” The positive outlook marks a significant change from the previous year when other regions were preferred over the UK. However, geopolitical fears continue to be the primary concern for CFOs.

Recent data indicates that housebuilding has prevented a significant downturn in the construction sector, with residential work rising to 50.7 in June, surpassing the neutral benchmark of 50. Despite a rise in stamp duty rates potentially dampening demand, firms reported an increase in new projects and sales pipelines. However, other areas like commercial and civil engineering faced declines, with commercial activity dropping sharply. Staffing numbers continued to decrease due to higher employment taxes set by Chancellor Rachel Reeves, while material costs rose. Matt Swannell from EY ITEM Club noted that “recent PMI readings appear to have been overly pessimistic,” suggesting that while the sector faces challenges, there are signs of resilience.

Labour has initiated plans for increased taxes on the wealthy, alcohol, and fossil fuels by committing the UK to a new United Nations agreement. The move marks a significant shift in policy, as Sir Keir Starmer aims to implement measures that contrast sharply with US President Donald Trump, who withdrew from the same pact. The Sevilla Commitment, agreed at a five-day summit in Spain last week, specifically mentions taxes on “high net-worth individuals”, as well as tobacco and alcohol, natural resources and pollution. Budgeting and taxation would also be “gender-responsive” and countries should also consider the environment, biodiversity, climate, and food security when setting their budgets, the agreement states. Gareth Davies, the shadow Treasury minister, accused Labour of “outsourcing tax policy to organisations that don’t reflect the priorities of the British people” and making Labour’s tax hikes harder to reverse. But a government spokesman said: “This agreement is not legally binding. UK tax-setting powers are for the Chancellor and the Chancellor alone.”

Jim O’Neill, a former Treasury minister, has cautioned that Rachel Reeves must reconsider her pledge not to raise taxes to address a £5bn shortfall following the abandonment of welfare reforms. He said: “Without changing some of the big taxes, welfare and pensions, they can’t commit to things like Northern Powerhouse Rail.” The pressure on the Government has intensified after a challenging week, with Labour’s popularity declining in the polls. O’Neill suggested that the Government should focus on long-term priorities rather than short-term political concerns. Luke Tryl, UK director at More in Common, echoed this sentiment, advocating for broad-based tax increases to improve public services before the next election. The comments come as the Institute for Fiscal Studies indicates that significant tax increases are likely necessary to address the financial gap.

Recent YouGov research highlights significant public scepticism regarding the Government’s manifesto commitments, particularly concerning tax increases. Despite assurances from the Chancellor, 35% of respondents believe action on income tax, VAT, or NICs is “very likely,” with 37% considering it “fairly likely.” Even among Labour supporters, 70% expect tax hikes, while 84% of Tories share this sentiment. Ben Zaranko from the IFS think-tank warned that the scale of potential tax increases could mirror last year’s record £41bn package, stating: “It’s not hard to imagine a world where they are of a ballpark similar scale to last autumn.” Deutsche Bank analysis suggests the fiscal gap Rachel Reeves must address could range from £18bn to £32bn, indicating that breaking the Labour manifesto may become unavoidable if the shortfall exceeds £20bn.

Lord Kinnock, who led the Labour Party between 1983 and 1992, has come out in support of a wealth tax, alongside a raft of unions. Lord Kinnock told Sky News a 2% tax on assets worth more than £10m could help raise about £10bn a year for the Treasury. Unison, Unite, Usdaw and the FBU have all joined calls for a wealth tax as a means to raise cash to fund the welfare state and invest in public services. According to a report by the Wealth Tax Commission, around 20,000 taxpayers would be eligible to pay the wealth tax if the threshold was set at £10m. But experts including Dan Neidle, the founder of Tax Policy Associates, said the proposal was “fantasy politics” and that the wealthy would simply move overseas. Downing Street is said to be cautious about the idea with Liz Lloyd, a senior policy figure in No 10, reportedly questioning whether existing wealth taxes were harming Sir Keir Starmer’s “mission” of growing the economy.

Wealthy individuals in Europe are increasingly facing “exit taxes” as countries like Germany, Norway, and Belgium implement stricter measures to prevent high-net-worth residents from emigrating. These taxes impose a one-off charge on the value of assets when leaving, aimed at curbing the trend of affluent citizens relocating to low-tax nations such as Switzerland and the UAE. A report by Henley & Partners predicts that 16,500 millionaires will leave Britain by 2025, up from 10,800 last year. Chris Etherington from RSM noted that while the UK has historically resisted such taxes, pressure on Chancellor Rachel Reeves to consider an exit tax may grow if capital gains tax rates are increased.

Hiring confidence among UK employers has reached its lowest point in 13 years, according to BDO’s Business Trends barometer. The report highlights that the rise in national insurance, which adds £20bn annually to employers’ costs, has led to a “prolonged caution from UK business.” Many firms are hesitant to recruit due to policy uncertainty and the prospect of further tax increases in the autumn budget. Scott Knight, head of growth at BDO, commented: “We’re seeing early signs of recovery in business output,” primarily driven by the services sector. “But as we all know, we can’t rely on good weather forever.” A separate survey by the CBI found optimism among financial services bosses has fallen sharply, with many signalling that they plan to cut headcount in the coming months.

As artificial intelligence (AI) increasingly takes over entry-level tasks, recent graduates are facing a challenging job market. Connor Myers, a student at the University of Exeter, points out that major firms like Deloitte and EY have reduced their graduate recruitment by 18% and 11%, respectively. According to Adzuna, entry-level job opportunities in finance have plummeted by 50.8%, while IT services have seen a 54.8% decrease. Myers notes: “The last thing a person needs aged 21 is for an AI model to take the job they were told their degree was essential for.” The shift raises questions about the value of degrees in fields like accountancy, as AI continues to reshape the employment landscape.

Deputy Prime Minister Angela Rayner has announced significant amendments to the Employment Rights Bill aimed at preventing the exploitation of workers through fire and rehire tactics. In an op-ed for the Mirror, Rayner stated: “We promised to call time on scandals like P&O and with this amendment we are removing any doubt.” The new legislation will prohibit companies from replacing dismissed employees with agency staff, ensuring that workers cannot be forced into worse conditions. The move follows the controversial sacking of 800 seafarers by P&O Ferries in March 2022. The Bill also aims to ban zero hours contracts and provide basic protections for all workers from their first day on the job. Over 15m people are expected to benefit from these changes.

IPO fundraising in London has plummeted to a 30-year low, with only £160m raised from five listings in the first half of the year, the lowest since 1995, according to Dealogic data. The decline has prompted several firms to consider relocating their primary listings to New York, including fintech firm Wise and pharma giant AstraZeneca. Jonathan Parry, a partner at White & Case, noted: “The recent muted IPO activity has been a global phenomenon impacted by geopolitical factors and macroeconomic volatility.” However, he expressed hope for a turnaround, citing recent IPO announcements from tech firm Visma and Greek company Metlen Energy & Metals, and the ongoing reforms by the London Stock Exchange and FCA aimed at revitalising the market. Parry believes these changes could lead to a new IPO cycle, stating: “London remains both Europe’s preeminent financial centre and its largest listing venue.”

Louis Taylor, chief executive of the British Business Bank, has urged UK pension funds to seize the “gold mine of opportunity” in private companies as they prepare to invest hundreds of millions in venture capital. He stressed the need for a “Festival of Britain on the innovation economy” to enhance understanding of the UK’s strengths. Taylor stated: “If everybody appreciated properly the opportunities there are in the UK, nobody would need mandating.” The British Business Bank, with a total capital of £25.6bn, aims to raise hundreds of millions from pension funds for its new British Growth Partnership, which is set to make its first investment this year. Critics argue that fund managers should prioritise returns for savers over national economic goals.

A recent parliamentary report has revealed that the cost of economic crime in the UK exceeds £290bn annually, representing 17.5% of GDP, which is equivalent to the total health and education budgets combined. The report highlights that HMRC has not imposed fines on any offshore tax evaders in the past five years, and over 170 properties valued at £2.5bn have been acquired through suspicious means. Additionally, it notes that a quarter of Serious Fraud Office cases involve companies from the UK’s Overseas Territories. The report suggests that addressing tax evasion and promoting asset recovery could be effective solutions, but progress remains slow, particularly as five overseas territories failed to meet a deadline for establishing company ownership registers, potentially leading to a constitutional conflict with the UK.

Joseph Stiglitz has declared the planned global minimum tax on multinational profits “probably dead in the water.” After years of advocacy by Stiglitz, the OECD, and the Tax Justice Network, the initiative aimed to curb profit shifting to low-tax havens. However, the second Trump administration’s opposition has derailed progress, labelling the tax regime as unfair and threatening “revenge taxes” on nations that comply. While most countries have retreated in the face of these threats, Spain is urging the European Union to resist. Stiglitz argues that the EU’s economic strength could enable it to stand firm, cautioning that “if [Trump] gets what he wants, he always comes back for more.” Despite the potential for resistance, he doubts the necessary political will exists within Europe.