Rachel Reeves has reiterated a pledge that the Government will not increase income tax, National Insurance or VAT, but declined to comment on whether Labour could introduce a new wealth tax. The Chancellor said ministers will honour manifesto commitments on the taxes that will not be hiked, “because I do recognise the struggle that ordinary working people have faced these last few years with the cost of living.” Ms Reeves comments come after Transport Secretary Heidi Alexander said the Government will not hike them for those on “modest incomes, working people.” Urged to offer a definition of “working people,” Darren Jones, Chief Secretary to the Treasury, told Sky News it was “anyone that gets a payslip, basically.”

Deutsche Bank economist Sanjay Raja has warned that the introduction of a wealth tax would be “extremely difficult to implement effectively, efficiently and equitably.” With Chancellor Rachel Reeves looking to restore the Government’s £9.9bn fiscal headroom, ministers including Prime Minister Keir Starmer have refused to rule out a wealth tax. However, Mr Raja says such a levy would take years to set up and require substantial investment in personnel and tools to track assets. He also suggested that a tax rate of 0.25% on private pensions on the top 10% of wealth would raise £5bn, while targeting net property wealth could bring an additional £5bn. He added that a taxable threshold of £1m per household could pull in £7bn.

The company behind The Shard has warned that tax hikes are driving wealthy overseas investors out of London. In a statement signed off by the board, Real Estate Management (UK), said: “The long-heralded change in UK tax rules applied to overseas residents, which were accelerated by the current UK administration to apply from April 2025, have had the feared impact of driving many such investors away from the UK to escape double taxation of their worldwide income.”

Recruitment among UK firms is currently “static, stymied by the Government’s payroll taxes,” according to a British Chambers of Commerce poll of over 4,500 companies. Following the rise in National Insurance contributions in April, 60% of firms reported no change in staffing levels between April and June. It was shown that 23% did recruit, marking a slight increase from 20% in the previous quarter. Looking ahead, only a quarter of firms expect to expand their workforce, down from 27%.

Data from McKinsey & Co shows that online job postings fell 31% in the three months to May, compared with the same period in 2022. Analysis shows that the decline jumps to 38% in roles identified as highly exposed to AI, such as software engineering, finance, and consulting. Tera Allas, senior adviser at McKinsey, said: “The anticipation of significant – albeit uncertain – future productivity gains, especially as the technology and its applications mature, is prompting companies to review their workforce strategies and pause aspects of their recruitment.” Meanwhile, jobs platform Adzuna has found that postings for internships, apprenticeships, and junior positions have fallen by almost a third since late 2022, with the decline coinciding with the rise of generative AI tools. Elsewhere, data from PwC shows that job listings in the 25% of roles least exposed to AI have increased significantly since 2012, while those most exposed have remained flat or declined.

The Financial Conduct Authority (FCA) has announced major reforms designed to simplify fundraising rules for listed companies, aiming to reduce costs and boost the City of London’s global competitiveness. The most significant change is raising the threshold for requiring a prospectus from 20% to 75% of a company’s existing share capital, effective from January. This move is expected to save businesses around £40m annually. However, the change has faced pushback from some industry groups, who fear it could reduce transparency and harm investor confidence. The FCA said that during consultations, some trade bodies had argued for the threshold to be raised to only 33% and voiced concern that “a higher threshold may result in information asymmetry between issuers and investors and create legal uncertainty, eroding the stability and reputation of UK markets.” The reforms are part of broader efforts to revitalise the UK stock market and support economic growth.

Rachel Reeves is set to announce a significant reduction in regulation covering financial services, with the Chancellor vowing to cut “reams of financial red tape.” The reforms will look to abolish the certification regime affecting nearly 140,000 finance professionals and streamline senior management appointments, reducing regulatory review timelines from three months to two. A new concierge service will be introduced to attract overseas financial firms, providing tailored support for investment and growth in the UK. Ms Reeves believes that the measures – which the Treasury says will be the “biggest financial regulation reforms in a decade” – will have “a ripple effect that will drive investment in all sectors of our economy and put pounds in the pockets of working people.”

Economists do not believe that high inflation will deter Bank of England officials from cutting interest rates. A Bloomberg poll of City analysts shows that inflation is expected to remain at 3.4% in June, holding at 1.4% above the Bank’s 2% target for the third consecutive month. Jack Meaning of Barclays said this rate of inflation would “not be sufficient to lead the Monetary Policy Committee to deviate from a quarterly rate-cutting path,” while RBC analysts said: “As long as services consumer price index inflation continues to fall in line with the MPC’s expectations, we think it is sufficient for it to continue to ease policy in its current, gradual, manner.” While Deutsche Bank’s Sanjay Raja said June’s data will show the beginning of an “ascent,” Cathal Kennedy at RBC Capital Markets believes the current trend marks a “blip.”

In the past five years, HMRC staff have lost tech worth £2m, with around 2,300 mobile phones and 507 laptops going missing since 2021. The tax office has faced criticism for its handling of equipment losses, particularly as staff have lost approximately 10 mobile phones and two laptops weekly over the past year. William Yarwood from the TaxPayers’ Alliance said: “It’s a disgrace … if the taxman expects the public to keep track of every penny they owe, the least they can do is keep track of their own phones and laptops.” HMRC officials note that they take immediate action to deactivate lost devices and have measures in place to secure data.

The UK has overtaken Hong Kong and is now the second most expensive city in the world for ultra-net worth individuals after Singapore, according to an annual ranking by Julius Baer. Researchers from the Swiss bank said that London has managed to “hold its position as one of the most appealing global cities for the wealthy,” despite the Government introducing tax raids including the abolition of non-domiciled residency status and changes to inheritance tax.