Data from the Financial Conduct Authority shows that savers pulled more than £70bn from their retirement pots in 2024/25 amid concerns that the Budget could deliver a tax raid on pensions. This marks a 36% increase on the total withdrawn from pension pots the year before. There is speculation that Chancellor Rachel Reeves could cut the tax-free lump sum that can be drawn down, having already announced that retirement savings will be brought into inheritance tax from 2027. While savers are currently able to withdraw up to a quarter of their pension pots tax free from the age of 55 – up to a maximum of £268,275 – Pensions Minister Torsten Bell has called for the tax-free withdrawal threshold to be cut to £40,000. Mr Bell, a former CEO of the Resolution Foundation think-tank, also supports reforming pensions tax relief. Andrew King, retirement specialist at wealth management firm Evelyn Partners, said: “We would encourage all pension savers to think twice before making major withdrawals from their pots, especially in anticipation of rumoured policy changes that might not materialise.” Overall, withdrawals from pension pots increased to £70.9bn in 2024/25 from £52.2bn in 2023/24.

The Bank of England says fears of further tax increases are negatively impacting the economy. The Bank’s agents, who speak to business leaders across the country, said bosses have voiced concern over potential tax rises in the upcoming Budget. Reflecting on why inflation is almost double the Bank’s 2% target, Governor Andrew Bailey cited the increase in employer National Insurance contributions “and pay growth in sectors with a large share of employees at or close to the National Living Wage.” Economists estimate that Rachel Reeves needs to identify £20bn to £50bn in tax increases or spending cuts as she looks to plug a gap in public finances.

HMRC is launching a significant initiative to recover £7.5bn from tax evaders by 2030. The Treasury will recruit 6,000 new staff, including 5,500 compliance caseworkers and 400 offshore specialists. The plan includes a £500m investment in digital services, requiring sole traders and landlords earning over £50,000 to file taxes digitally by April 2026. The reforms aim to enhance compliance and support public services, not just target fraudsters.

The Treasury Committee has written to leading tech firms calling for detailed information about the role they play in providing AI services to the UK financial sector. In a letter to OpenAI, Microsoft, Meta, Amazon, Google Cloud, and Anthropic, the committee calls for insight into their AI strategies, preparations for system failures, and interactions with the Bank of England and Financial Conduct Authority. The firms have also been asked to outline their views on proposed legislation such as the Artificial Intelligence (Regulation) Bill. Research by Lloyds shows that more than 90% of senior leaders in banks, insurers, and asset managers see AI as more of an opportunity than threat, with this up from 80% in 2024. Separate analysis by Juniper and Zopa Bank suggests AI could put around 27,000 banking jobs at risk, with up to 178m work hours potentially cut over the next five years.

Fashion chain Next has warned that the “medium to long-term outlook” for the UK economy “does not look favourable.” The retailer said that while it does not believe the economy “is approaching a cliff edge … At best we expect anaemic growth.” In a statement, it flagged four factors it believes will constrain progress: “Declining job opportunities; new regulation that erodes competitiveness; Government spending commitments that are beyond its means; and a rising tax burden that undermines national productivity.”

Analysts warn that Energy Secretary Ed Miliband’s windfall levies and drilling restrictions in the North Sea could lead to a £10bn loss in tax revenue by 2030. The investment bank Stifel predicts that tax revenues from the oil and gas sector will fall to £6bn, significantly lower than the £16.2bn forecast by the Office for Budget Responsibility. Stifel noted that high tax rates are making investment in the North Sea unviable, risking up to 100,000 jobs. David Whitehouse, CEO of Offshore Energies UK, stated: “Without changes to the fiscal regime, UK oil and gas could disappear within years.”

Analysis by online trading platform IG suggests that concerns over falling stock prices are putting savers off investing. It was found that three in five savers believe any form of retail investing is too risky, while more than 70% said disclaimers highlighting the risks involved were enough to prevent them moving away from cash and savings accounts. Over 50% of respondents were unaware that cash loses value over time and 30% said they would be more likely to invest in the stock market if cash accounts detailed the inflation risks. Michael Healy, UK managing director at IG, said: “We urgently need to change the perception of investing so more people in the UK can benefit from the long-term wealth building opportunities it offers.”

The Bank of England has held interest rates, with the Monetary Policy Committee (MPC) voting 7-2 to keep the base rate at 4%. The Bank said it is “focused on squeezing out any existing or emerging persistent inflationary pressures.” This comes after official data revealed that year-on-year inflation hit 3.8% in August. Andrew Bailey, the Bank’s governor, said that while he expects inflation to return to the Bank’s target level of 2%, “we’re not out of the woods yet so any future cuts will need to be made gradually and carefully.” The Bank also announced that it will reduce the rate at which it sells its stock of UK bonds as part of its quantitative tightening process. The Bank, which reduced the amount of debt it owns by about £100bn in the last year, said that from October onwards, it would reduce this to £70bn a year.

Glasgow City Council is launching a year-long trial of AI-powered traffic signals to enhance bus journey times and efficiency. Funded by the Scottish Government’s Bus Infrastructure Fund with £1.27m, the initiative will focus on Pollokshaws Road, a vital transport route. The AI system aims to prioritise buses at more than 20 junctions, potentially reducing delays significantly.