US financial firms have announced UK investments worth £1.25bn that could create 1,800 jobs. While Citi is planning to invest £1.1bn across its UK operations, S&P Global is set to pump £4m into its Manchester offices. PayPal has confirmed a £150m investment in product innovations and growth, while Bank of America will create up to 1,000 new jobs in Belfast in its first operation in Northern Ireland. Alongside these investments, BlackRock is allocating £7bn to the UK market over the next five years. The Department for Business and Trade says these investment and capital commitments will equate to £20bn in trade between the two countries, with around £8bn set to come to the UK and £12bn to go to the US. Business and Trade Secretary Peter Kyle said: “Strengthening ties with the US boosts our economy, creates jobs, and secures our role in global finance,” while Chancellor Rachel Reeves said that the commitment from the US firms “demonstrates the immense potential of the UK economy.”

AstraZeneca has paused its £200m investment in Cambridge, leaving its entire £650m UK investment package stalled. The decision follows the cancellation of a £450m investment in Merseyside due to reduced government support. An AstraZeneca spokesperson said: “We constantly reassess the investment needs of our company and can confirm our expansion in Cambridge is paused.” The setback comes amid broader concerns for the UK pharmaceutical sector, with other companies like Merck also scaling back investments. Sir John Bell warned that major pharmaceutical firms may cease investing in the UK altogether.

OpenAI and Nvidia plan to invest billions in UK data centres during US President Donald Trump’s upcoming state visit. Sam Altman, CEO of OpenAI, and Jensen Huang, CEO of Nvidia, are collaborating with London-based Nscale Global Holdings on this initiative. The UK Government is expected to provide energy for the project, while OpenAI will offer AI tools and Nvidia will supply chips. Sir Keir Starmer in January unveiled plans to position the UK as an AI superpower, promoting data centre growth and technology adoption across government.

US economist Arthur Laffer has warned that further tax increases in Britain will be counterproductive, reducing revenue by discouraging work, investment, and capital. During a meeting with Sir Mel Stride, the shadow chancellor, in the US earlier this month, Dr Laffer said the UK is probably beyond the point at which further tax rises become futile because they cost more money than they raise. Commenting on his meeting, Sir Mel said: “The lesson of the Laffer curve is clear and proven: if a tax gets pushed up too high, you don’t end up with more revenue – you get less. There is a tipping point where higher taxes suffocate a nation’s spirit of enterprise – and it’s time to sound the alarm for Britain.” In a piece for the Sunday Telegraph, Sir Mel adds: “The mood music ahead of this autumn’s Budget is bleak. To plug a black hole of its own creation, Labour looks set to double down on what is already the steepest tax squeeze in a generation.”

Rachel Reeves has been urged to give companies a stamp duty holiday when they list on London’s stock exchange, with a taskforce set up by the Chancellor proposing a break of up to five years from the 0.5% levy. Charlie Walker, deputy chief executive of the London Stock Exchange, says stamp duty “disincentives” investment in UK companies, while Charles Hall, head of research at investment bank Peel Hunt, says the tax serves as a “psychological barrier” to share purchases. On the potential impact of a stamp duty holiday, Sue Noffke, head of UK equities at Schroders, said: “There would be a bang for your buck in terms of what it’s signalling.” While the charge raises about £4bn a year for the Treasury, those calling for a stamp duty holiday argue that London’s low rate of new listings means that the tax take would be largely unaffected.

CS Venkatakrishnan, the CEO of Barclays, has urged the UK Government to control public sector wage increases and avoid further tax hikes on banks. Speaking to the Financial Times, he points out that UK banks were taxed at a rate of approximately 46% last year, significantly higher than their counterparts in New York and the EU. Venkatakrishnan said: “London is a great global financial centre and the path to growth does not lie to taxing the sector even more.” He added that he hoped that the upcoming autumn Budget will focus on fostering growth despite the challenges ahead.

The Treasury is reconsidering a proposed increase in landfill tax following significant backlash from industry leaders. The plans, which aimed to eliminate exemptions and reduce rates, were revealed unexpectedly, causing anger among sectors like housebuilding and construction. Currently set at £126.15 per tonne, the tax could see costs for large housebuilders rise dramatically. One industry source noted: “They are still trying to get a grip on the impact and implications of the reforms.” The Government has requested further evidence from businesses by next Friday, with a potential delay in decision-making expected.

George Weston, CEO of Primark’s parent company Associated British Foods, has warned the Government against further business tax increases, describing proposed business rates changes as “mistaken” and burdensome for large high-street stores. He highlighted that recent rises in employers’ National Insurance, minimum wage, and packaging taxes have already pressured businesses investing and creating jobs. While small high-street firms may benefit from the planned business rates shake-up next April, larger retailers will face significantly higher bills, with 363 large shops expected to see increases totaling £45.8m annually. Industry experts argue that taxing anchor stores undermines high streets, investment, and employment, and conflicts with government objectives to support retail, urging policymakers to reconsider the surtax ahead of November’s Budget.

The UK faces a significant decline in its manufacturing sector, which has dropped from 16% of GDP in 1990 to just 8% today. The decline hampers the country’s ability to convert innovative ideas into economic value. Peter Williams, group technology director at Ineos, says in a piece for the Mail: “Without a strong industrial base, we also have no springboard for the industries of the future.” The Government must address high energy costs, streamline permitting processes, and support emerging industries to revitalise manufacturing and ensure economic resilience, Williams adds.

The UK economy showed no growth in July, with the manufacturing sector contracting by 1.3%, the largest decline in a year. The Office for National Statistics (ONS) reported that while services grew by 0.1%, this was not enough to offset the manufacturing downturn. Liz McKeown, ONS director of economic statistics, said: “Growth in the economy as a whole continued to slow over the last three months.” Lindsay James, investment strategist at Quilter, said the Government’s increased employer national insurance contributions are affecting business confidence, leading to a slowdown in growth across sectors.

Economists believe interest rates are set to be held at 4% until 2026. The Bank of England’s Monetary Policy Committee (MPC) is set to vote on whether to cut rates this week as is expected to hold the base rate at 4% after cutting it from 4.25% in August. Thomas Pugh, chief economist at RSM UK, said it is “all but guaranteed” that the MPC will hold interest rates at 4%, adding that it will “stick to its gradual and cautious guidance, as it continues to try to balance rising inflation with a weakening labour market.” Philip Shaw, an economist for Investec, expects rates to be held at 4% until the end of the year, with the next cut in February, while economists at Pantheon Macroeconomics said the late Budget “will likely also encourage the MPC to wait until December at least before considering another cut.”

The Office for Budget Responsibility (OBR) may downgrade productivity forecasts, risking a shortfall for Rachel Reeves. Following stagnant economic growth in July, officials are reassessing their outlook. Andrew Goodwin from Oxford Economics warned that aligning forecasts with external consensus could necessitate fiscal tightening of £20bn. James Moberly from Goldman Sachs noted that even a minor adjustment could impact headroom by £8bn. The OBR’s decision is critical, as it could force the Chancellor to raise taxes, further straining the economy. Goodwin stated: “The longer it goes on, the greater the pressure to revise it.”

Over 90% of employers anticipate that Rachel Reeves will impose restrictions on pension salary sacrifice schemes in the forthcoming autumn Budget, according to a Censuswide survey for BDO. Nearly half of C-suite executives view these restrictions as “quite likely,” while 45% consider them “very likely.” Caroline Harwood, head of employment tax at BDO, said: “It’s clear from our survey findings that employers are bracing themselves for reform.”

Large employers in the UK will soon be mandated to publish gender pay gap action plans under the Employment Rights Bill (ERB). The new requirement aims to enhance transparency and accountability in addressing wage disparities. Analysis by Pinsent Masons shows a slight decrease in the average hourly median pay gap to 11.28% for 2024-25. While women’s representation in top salary quartiles has improved, they still dominate lower-paid roles, making up 54.72% of the lowest quartile.

Research by the Chartered Management Institute (CMI) shows that a third of UK employers use “bossware” to monitor employee activities, including emails and web browsing. The survey indicates a rise in workplace surveillance, with one in seven employers recording screen activity. While some managers believe monitoring prevents insider threats, many express concerns about trust and privacy. The CMI study found that more than half (53%) of managers support monitoring of employees’ online activities on employer-owned devices, while 42% oppose it. Petra Wilton, the CMI’s director of policy and external affairs, said: “If it is being used, it is incredibly important employers are open.” The Information Commissioner’s Office has warned that excessive monitoring can infringe on privacy rights, especially for remote workers.

Analysis by UHY Hacker Young shows that 16 firms listed on AIM through initial public offerings in the year to July 31, marking a jump on the nine seen a year earlier. The average raised per listing came in at £9.9m, compared to £6.8m in the previous year. Colin Wright, chairman of UHY Hacker Young, said the AIM market is “starting to see green shoots of recovery,” suggesting that despite a “tough economic environment, some ambitious businesses are finding investors ready to back them.” He added that this “should give confidence to other companies considering a listing.”

A report from trade group UK Steel shows that UK steelmakers are facing significantly higher electricity costs than their European rivals, paying up to 25% more than producers in France and Germany. UK Steel said this will mean an extra £26m in annual costs for UK firms, which it likens to the sector operating with “a hand tied behind its back.” Gareth Stace, director-general at UK Steel, warned that “uncompetitive” power prices pose a threat to jobs and future investment.

According to a recent poll by Electoral Calculus and Find Out Now, 32% of the public supports balancing the budget primarily through spending cuts, while only 14% favour tax increases. The survey of over 2,000 respondents indicates that 29% would prefer cuts to the £160bn welfare bill. Martin Baxter from Electoral Calculus commented: “The findings show that the public wants the Government to get the deficit under control and balance the budget.” However, voters are hesitant about where to make cuts, especially in essential services.