The Guardian reports that ministers are considering introducing a lifetime cap on the amount an individual can give away as part of their inheritance tax planning. At present, gifts made seven years before someone dies are not subject to IHT. A source told the paper that the Treasury is also reviewing rules around the taper rate, which sees gifts given three to seven years before death taxed on a sliding scale, from 32% to 8%. “With so much wealth stored in assets like houses that have shot up in value, we have to find ways to better tap into the inheritances of those who can afford to contribute more,” the source said. The Treasury is also looking at increasing capital gains tax rates with an allowance for investors who put money into British businesses. Commenting on the news, Sir Mel Stride, the Conservative shadow chancellor, said: “Those who have worked hard, saved and want to pass something on to their loved ones shouldn’t be punished by yet more taxes from Labour…Rachel Reeves is taxing your family’s future to fund her failure.”

Proposed changes to inheritance tax (IHT) will affect pension savings of individuals who die before age 55, set to take effect in April 2027. Critics, including Ian Cook from Quilter Cheviot, argue this is “abhorrent” and unfair, as it taxes funds that beneficiaries never had the chance to access. The new rules will treat unused pensions like other assets, imposing a 40% tax on estates above a certain threshold. A Treasury spokesperson stated that over 90% of estates will remain exempt from IHT, but many experts warn this could discourage long-term pension savings.

HMRC has refunded £48.7m in overpaid tax from April 1 to June 30, averaging £3,815 per claim. Many elderly Britons are urged to check their eligibility for refunds, particularly if they faced emergency tax upon their first pension withdrawal. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “The overpaid pension tax saga continues to drag on.” She highlighted that first-time lump sum withdrawals often incur higher tax bills, which can disrupt retirement plans.

Unemployment in the UK remains steady at 4.7%, according to the Office for National Statistics (ONS). However, pay growth has slowed from 5% to 4.6%, and vacancy rates have dropped by 44,000, marking the 37th consecutive decline. Suren Thiru, economics director at the ICAEW, noted that rising employer national insurance costs are impacting hiring. He stated: “The UK jobs market is facing more pain in the coming months.” Recent reports indicate that recruitment intentions are at a record low, particularly affecting young job seekers. Rachel Reeves, the Chancellor, defended Labour’s job creation record but acknowledged the need for further progress.

Data published by the Department for Work and Pensions (DWP) show the number of Britons claiming Universal Credit with no requirement to look for work is up by a million since Labour came to power, to reach 3.7m people. The over-50s are driving the surge, with experts suggesting this was partly linked to the rising state pension age – more people in their mid-60s are now eligible for working age benefits – while rising unemployment and the worsening jobs market had also pushed more people onto benefits.

Research by EY reveals that declining productivity in the NHS and public services costs the UK economy £80bn annually. Since 2019, public sector output has fallen by 5%, while the private sector has grown by 3%. If productivity gaps persist, losses could reach £170bn by 2030. Peter Arnold, chief UK economist at EY, said: “If left unaddressed, [underperforming productivity] will continue to act as a drag on UK growth.” Arnold added: “With public sector spending now accounting for 44% of GDP, a more productive public sector is vital to achieving better productivity and a stronger UK economy.”

Small and medium-sized enterprises (SMEs) are hesitant to invest due to economic uncertainty, according to the Azets Barometer Spring Survey. High wage costs, tariffs, and unpredictable financial conditions are major concerns. Peter Gallanagh, CEO of Azets, stated: “SMEs are asking for clarity from the Government around tax policy and long-term economic plans.” The survey reveals that SMEs, which represent 99.8% of UK businesses and employ 60% of the workforce, are treating cash as insurance rather than a growth tool. Confidence in government support for skills training is also low, with only 18% of firms optimistic about solutions.

UK retail sales increased by 2.5% in July compared to last year, according to British Retail Consortium (BRC)-KPMG data. However, this growth is insufficient to cover the £7bn in new costs imposed on the sector. Food sales rose by 3.9%, driven by warm weather, but inflation at 4% indicates higher prices rather than increased demand. BRC chief executive Helen Dickinson warned that further taxes could force retailers to make tough decisions, impacting jobs and consumer spending. Barclays reported a 1.4% rise in consumer card spending, but confidence in the economy fell to 22%.

The Bank of England (BoE) has revised its estimate of net losses from its bond-buying programme to £115bn, down from £120bn, which the Treasury will have to cover. While the finance ministry profited £124bn during low interest rates, current higher rates have led to significant losses, projected to reach £30bn annually. BoE Governor Andrew Bailey stated that changes to the QE structure could disrupt monetary policy, despite criticism from politicians and former officials.

The deputy leader of Reform UK, Richard Tice, has been hosting breakfasts with UK business leaders as he looks to promote the party’s policies and boost support from corporate Britain. Businesses are being urged to form ties with parry leadership now to avoid being left behind after next year’s devolved elections. Bosses have been asked to compile a list of their biggest bugbears and what Reform can do to fix them. “I’m saying I want a three-pager, no more, with the regulatory problems affecting their industry and their recommended solutions,” Tice says. “We’re in listening mode.”