Ruth Gregory, deputy chief UK economist at Capital Economics, believes that Chancellor Rachel Reeves could target banks as she looks to boost Government finances in the Budget, warning: “We suspect households and banks will bear the brunt of higher taxes.” Capital Economics says an increase the bank surcharge and a quantitative easing (QE) levy are the two most likely tax rises in the Budget. Analysis shows that increasing the surcharge to 8% would raise £1.5bn, while changes to QE takings could pull in another £5bn. Ms Gregory said: “The problem is that if the Chancellor wants to raise large amounts of cash, she won’t get it by taxing banks,” adding that Ms Reeves may look to “combine several smaller tax increases.” Benjamin Toms, equity analyst at RBC, commented: “The Government was elected on a pro-growth agenda, and the banks are a key synapse of that objective,” adding: “We continue to believe that the Chancellor understands that any additional taxes on banks would represent a headwind to this ambition.”

The Federation of Small Businesses (FSB) has accused Chancellor Rachel Reeves of failing to support small firms amid a significant drop in job vacancies. Analysis by the Liberal Democrats has revealed an 18% decline in vacancies at small businesses following the employer National Insurance increase announced in last October’s Budget. Official figures show that in the three months to July, small businesses employing one to 49 people posted 216,000 job vacancies. This is down from 262,000 vacancies recorded in the three months to October 2024. Medium-sized businesses employing 50 to 249 workers saw a 13% drop, with vacancies falling by 16,000. FSB policy chair Tina McKenzie said: “Small businesses don’t feel the Government has their backs when it comes to creating jobs.”

Research from City St George’s at the University of London reveals that women in wealthy households earn 25% less than men. In contrast, the pay gap in lower-income households is only 4%. In higher–earning households, men earned an average of £29.27 per hour while women earned £21.94 per hour. Meanwhile, in lower–earning households, the average hourly earnings are £8.22 for men and £7.90 for women. The study, which analysed 40 years of work-history data, found that women spending less time in traditional full–time work accounts for nearly a third of the gender pay gap on average. On average, women are more likely to accept reduced–hour jobs, part–time work, poorly paid work, or to spend time out of the workforce for care-related tasks, such as looking after children.

The Employment Rights Bill could significantly impact small businesses, according to HR consultants. The Bill aims to enhance workers’ rights, including extending unfair dismissal rights and tightening zero-hours contract regulations. Government analysis estimates the measures could add £5bn to employer costs, with additional amendments potentially increasing expenses by £80m annually. Phil Coxon, CEO of Breathe HR, said: “British businesses face a perfect storm,” highlighting that the Bill “brings administrative, legal, and financial changes which will be challenging to implement.” The British Retail Consortium has warned that over half of retailers may cut staff in response to the Bill.

Analysis by recruitment firm Reed shows that employers are less willing to hire ex-offenders than they were in 2013. Reed chairman and chief executive James Reed says there is “compelling evidence that employment is the most reliable way to prevent re-offending,” adding that around a third of employers who have taken on ex-offenders say they are “as reliable, or even more reliable, than other staff.” Mr Reed says: “My message to business leaders is simple: open the door. A conviction should not mean a lifetime locked out of work.”

UK Government long-term borrowing costs have hit the highest level since 1998, with the interest rate on 30-year government bonds rising to 5.723%. Paul Dales, chief UK economist at Capital Economics, said concerns over inflation and interest rates, alongside global issues, are pushing UK Government borrowing costs up. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said that Chancellor Rachel Reeves has been “dealt a warning” by investors who are selling off Government debt, “clearly concerned that the Government may be losing its grip on the public finances.” With the Chancellor expected to increase taxes in the Budget, Ms Streeter said: “The worry isn’t just that Government coffers won’t be replenished, but that they will be filled at the expense of growth, leading to a vicious circle emerging.” Deutsche Bank’s Jim Reid warned of a “slow-moving vicious circle” where concerns over rising debt push yields higher, “worsening debt dynamics, which in turn push yields higher again.”

Home Office contractor Envestors has put forward plans for an investor visa to be re-introduced, saying that it could help the growth of research-led technology companies. Envestors, an investment service that assesses entrepreneurs applying to enter the UK via the innovator founder visa, has suggested that business angels – high-net-worth individuals that invest in high-growth companies – could be offered a special visa that would allow private SMEs to receive cash in return for equity. The report suggests that foreign nationals investing at least £2m in three UK companies would be able to secure indefinite leave to remain after three years, if 15 full-time workers are employed and £1m in annual revenue is generated. Analysis by the British Business Bank shows that angel investors are the largest source of investment in start-ups and early-stage businesses.

Most companies facing mandatory sustainability reporting in the EU intend to proceed with their disclosures, despite potential changes to the rules. A KPMG survey of over 1,300 executives revealed that nearly 75% plan to maintain their compliance with the EU’s Corporate Sustainability Reporting Directive. This commitment persists even as the bloc considers simplifying and reducing mandatory disclosures. KPMG said: “Our findings show a strong resolve among companies to meet sustainability reporting requirements.”

A shortage of staff could be a “serious” barrier to growth at small to mid-tier accountancy firms, according to analysis from outsourcing specialists Advancetrack. The study shows that 94% of firms say recruitment issues are holding back growth. It was also shown that 74% said the recruitment crisis is preventing them from taking on more clients. More than two-thirds of those firms said they are outsourcing work overseas, with a further 33% offshoring. Almost half of the firms polled said they are facing rising salary pressures. Advancetrack surveyed nearly 170 firms, with these predominantly from the UK and Australia.