Confidence among London’s small business community has significantly declined, with predictions of growth dropping from 48% to 37% in just three months, according to the latest Novuna Business Finance report. This marks the fourth consecutive quarter of falling growth expectations, now at a national low of 26%, reminiscent of the lockdown period in 2020. The report highlights that while some sectors like manufacturing and construction saw slight improvements, others, including real estate and hospitality, experienced notable declines. The overall sentiment indicates a challenging second half of 2025 for small businesses, particularly in London, which has historically led the growth agenda for the UK.

The Office for Budget Responsibility (OBR) has raised concerns about the UK’s public finances, describing them as being in a “relatively vulnerable position.” The OBR’s annual fiscal risks and sustainability report indicates that total debt could exceed 270% of GDP by the early 2070s, up from the current 96.5%. The report attributes this to various factors, including the pension triple lock, which is projected to cost £15.5bn annually by 2029-30, significantly higher than initial estimates. The report also warns of future risks from rising defence spending and climate change impacts.  Analysts predict the Government may need to raise up to £30bn in taxes to address these challenges. Labour is considering a wealth tax to meet its commitments despite the top 1% already contributing a significant portion of income tax.

As Rachel Reeves explores new strategies to enhance tax receipts, small businesses are urging her to reconsider the recent tax hikes introduced in the Autumn Budget. Research from Simply Business indicates that one in five SMEs may face closure if economic conditions do not improve. Julie Fisher, UK chief executive of Simply Business, said: “Suggestions of further increases come at a time when small business confidence is at a low point.” Over 50% of firms anticipate a worsening economy, a significant rise from 2023. Fisher stressed the need for a simplified tax process and the reversal of national insurance increases to restore confidence among SMEs.

City leaders, including Sir Martin Sorrell and Sir Rocco Forte, have expressed concern that a proposed wealth tax could lead to a significant exodus of entrepreneurs from the UK. Sir Rocco said: “Labour has already seen a huge exodus of wealthy people,” warning that the tax would exacerbate this trend. S4 Capital’s Sir Martin Sorrell added that it would not only drive away the wealthy but also those aspiring to accumulate wealth. Former RBS chair Sir Philip Hampton described the policy as “very anti-growth,” stressing that it would deter investment in the country. Meanwhile, Labour figures, including transport secretary Heidi Alexander, argue that those with “the broadest shoulders” should bear the highest tax burden, aiming for fairness in taxation while promoting economic growth.

The Confederation of British Industry (CBI) warns that London’s stock market may “drift into irrelevance” without significant reforms, including tax breaks for listings and changes to bonus rules for directors. The CBI’s report, Revitalising UK Public Markets, outlines 20 recommendations aimed at revitalising the London Stock Exchange, which has seen a decline in listings due to competition from foreign markets. The report states: “With domestic capital shifting away from UK equities… the UK stands at a pivotal moment for the future of its public equity markets.” It suggests that making flotation costs tax-deductible could encourage more companies to list, while also advocating for a review of company rules to foster a more risk-taking culture among board members.

HM Revenue and Customs (HMRC) has imposed late penalties on 600,000 low earners, many of whom owe no tax. The automatic £100 fine for missing the January 31 deadline can escalate to over £1,600. Dan Neidle from Tax Policy Associates highlighted that “the Government should act, and stop the most vulnerable in society having their lives made harder by HMRC.” A Freedom of Information request revealed that those with no tax liability are more likely to incur penalties. The Low Income Tax Reform Group (LITRG) warned of a “two-tier” system, where low earners face higher penalties. Antonia Stokes from LITRG urged HMRC to expedite the new penalty regime rollout to benefit all taxpayers. HMRC stated that 11.5m customers filed their 2023-24 tax return on time and encouraged those who believe they have been wrongly fined to appeal.

The Office for Budget Responsibility (OBR) has projected that the cost of the state pension triple lock will reach £15.5bn by 2030, three times higher than initial estimates. The triple lock, implemented in 2011, ensures annual pension increases based on inflation, wage growth, or a minimum of 2.5%. The OBR noted that “due to inflation and earnings volatility… the triple lock has cost around three times more than initial expectations.” The rising costs are attributed to an increasing number of pensioners and the volatility of inflation. Chancellor Rachel Reeves has committed to maintaining the triple lock until the end of the current Parliament, despite ongoing debates about its sustainability. The influential Institute for Fiscal Studies has suggested reforming the system to link increases to average earnings instead. Pensioner groups argue that the triple lock is essential for protecting older individuals from rising living costs.

The Financial Conduct Authority (FCA) has imposed a £21m fine on Monzo due to inadequate financial crime controls during customer onboarding. The investigation revealed that Monzo allowed customers to register with “obviously implausible” addresses, including notable landmarks like 10 Downing Street and Buckingham Palace. The bank’s customer base surged from 600,000 in 2018 to over 5.8m by 2022, but its internal controls failed to adapt accordingly. Monzo’s CEO, TS Anil, acknowledged the fine but asserted that the issues have been resolved, leading to “substantial improvements” in their controls. The penalty follows a similar £29m fine imposed on rival Starling for lax financial crime measures.

Archie Norman, chair of Marks & Spencer, has called for a legal requirement for businesses to report significant cyber-attacks to authorities. During a session with the parliamentary Business and Trade Select Committee, he revealed that “a large number” of serious cyber-attacks go unreported, citing two major incidents affecting large UK firms in the past four months. Norman described the April cyberattack on M&S as “traumatic,” leading to a £300m loss in profit. He stressed the need for companies of a certain size to report material attacks to the National Cyber Security Centre (NCSC) within a specified timeframe, stating: “I don’t think it would be regulatory overkill.”

According to a recent survey by TSB, over half of individuals who followed financial advice from social media ended up losing money. The poll revealed that 31% of respondents acted on online money tips, with 55% reporting financial losses. Additionally, more than 40% of participants felt worse about their finances after encountering posts that flaunted wealth. Surina Somal, director of everyday banking at TSB, cautioned: “There could be useful sources of financial advice on social media. But there are also pitfalls through incorrect information and unregulated investments that could derail your finances.”