The recent bankruptcies of First Brands and Tricolor have raised concerns about the stability of the private credit market, according to Andrew Bailey, Governor of the Bank of England. He told the House of Lords financial regulation committee on Tuesday that these failures could indicate broader issues within the financial system, drawing parallels to the 2008 financial crisis. Bailey pointed to the need for a “stress test” of private equity and credit firms. He remarked: “Are these cases idiosyncratic, or are they what I call the canary in the coal mine?” The Bank’s deputy governor, Sarah Breeden, also noted vulnerabilities in the private finance sector.

Rachel Reeves may significantly impact the UK stock market with proposed changes in the upcoming autumn Budget. Experts from investment platform IG warn that a two-percentage point increase in dividend and capital gains tax could reduce the FTSE’s value by £4bn. Additionally, cutting the tax-free pension lump sum could lower annual pension contributions by £800m. Michael Healy, UK managing director at IG, stated: “The Government has been clear about its ambition to shift the UK away from a savings-first mindset and encourage more Brits to invest. That goal would be seriously undermined if any of the tax areas we’ve highlighted are targeted in next month’s autumn Budget.”

The UK Government is reforming anti-money laundering (AML) supervision by appointing the Financial Conduct Authority (FCA) as the Single Professional Services Supervisor (SPSS). The move reduces the roles of the Solicitors Regulation Authority (SRA) and HMRC. The FCA will now oversee legal, accountancy, and trust services, aiming for more consistent supervision. City minister Lucy Rigby MP said: “This change will align the supervision of professional services firms with other similar parts of the economy.” Reactions vary, with some praising the move for centralised oversight, while others express concerns about the FCA’s suitability for legal services.

The Association of Chartered Certified Accountants (ACCA) is calling on the Financial Reporting Council (FRC) to lessen the reporting burden on SMEs and focus on the complexity of business operations rather than company size. Responding to the FRC’s small and medium-sized enterprises market study, the body suggests that the regulator engage in a formal consultation process, particularly regarding the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities. Sector-specific guidance, educational resources, and collaboration with software providers to facilitate the adoption of technologies and to fill existing knowledge gaps is also recommended.

The Chancellor is expected to use the Budget to impose a new charge on people who use limited liability partnerships, such as lawyers, family doctors and accountants, as she seeks to address a £30bn gap in public finances. Partners are treated as self-employed, so they are not subject to employer’s national insurance, which is levied at 15% and they also pay a lower rate of employee national insurance – a situation Rachel Reeves reportedly considers unfair. A solicitor in a partnership earning the average £316,000 would face a charge of £23,000 under proposals drawn up by economists, equivalent to an average tax rate of 7.3%. Commenting on the proposals, Arun Advani, the director of CenTax, said: “Exempting partners from any equivalent to employer NICs is very regressive and simply means higher taxes for everyone else.”

Charlie Nunn, the CEO of Lloyds Banking Group, has cautioned against a proposed windfall tax on banks, arguing it could hinder lending to households and businesses. Speaking to Sky News, he stated: “If we are going to have the ability and the confidence to continue to lend into the real economy, we need to make sure that the financial services system remains healthy.” The banking sector, which reported record profits of £45.9bn last year, faces scrutiny as the Government considers tax adjustments to meet fiscal targets. Nunn warned that such measures could deter investment and disrupt the market. Elsewhere, UBS analysts suggest an increase in the bank surcharge from 3% to 5% is likely, but the increased costs will probably be passed on to customers.

UK government borrowing surged to £20.2bn in September, the highest for that month in five years, according to the Office for National Statistics (ONS). This figure represents an increase of £1.6bn from August. Over the first half of the financial year, borrowing totalled £99.8bn, the second-highest on record and £7.2bn more than forecast by the Office for Budget Responsibility (OBR) in March. Debt interest payments reached £9.7bn, with debt as a share of GDP at 95.3%. The Chancellor claimed the country’s economic woes were the fault of Brexit. However, former Brexit minister Lord Frost countered: “Reeves is talking nonsense… The collapse in economic expectations over the last year is entirely the responsibility of the Labour Government. No one else.”

UK businesses are anxious about potential increases in employer pension contributions, with nearly 20% fearing insolvency if mandated. Research from Barnett Waddingham reveals that over 30% of firms may freeze hiring or reduce staff to manage costs. Martin Willis, a partner at the firm, said: “Even a small increase to contributions could have an adverse effect.” Meanwhile, employees face concerns over pension adequacy, with many relying solely on auto-enrolment. The Government has revived the Pensions Commission to address these issues, but Barnett Waddingham warned reforms must not jeopardise business stability.

Allica Bank is set to announce its acquisition of Kriya, a London-based fintech specialising in embedded finance and business loans. This marks Allica’s third acquisition, following its integration of Allied Irish Bank’s SME portfolio and the purchase of Tuscan Capital in 2024. Allica aims to secure £1bn in working capital finance over the next three years. Kriya will continue to operate under its own brand post-acquisition.

Birmingham’s Digbeth is set to become a major hub for the creative industries with the launch of Production Central WM, a new movie production centre designed to attract international directors. The Warwick Bar Prospectus, part of Digbeth’s second-phase regeneration, will also include 110,000 sq ft of creative workspace and 1,700 new homes, supported by the Government’s £25m Creative Places Growth Fund.