The UK is on track for its worst decade of growth in 100 years, with average GDP growth projected at just 1.1% annually. The analysis by Andrew Sentance, a former Bank of England rate-setter, indicates that GDP per head will rise by only 0.4% each year. Rachel Reeves, the Chancellor, is preparing to announce further tax increases, potentially matching last year’s £40bn Budget. Sentance warned: “Raising taxes will just weaken growth further. Reining in spending is the only long-term solution.” He went on: “Mainstream politicians in this country seem to have lost the plot in terms of the policies that we need to get the economy back on track.”

Research indicates that 680,000 small businesses in the UK may relocate due to rising taxes. A survey by Rathbones revealed that 12% of 1,024 small business leaders plan to leave. Four in ten (42%) believe that the Government is hindering the private sector, while 63% feel that ministers fail to support entrepreneurship. Adebola Babatunde, a senior financial planning director at Rathbones, commented: “Their departure would mean the loss of valuable tax revenue and much-needed employment opportunities.”

Business leaders have urged Rachel Reeves to mandate pension funds to invest in British companies. They claim the move could inject £100bn into the London stock market, providing a vital boost to the UK economy. In a letter to the Chancellor, leaders from more than 250 companies including Barclays, GSK and Halfords said all “default” defined contribution funds – which the vast majority of British workers automatically pay into through auto-enrolment schemes – should be forced to invest at least 25% of their assets into British investments. David Schwimmer, the chief executive of the London Stock Exchange Group, authored the letter, which claimed the policy could help create a “virtuous circle” that would boost Britain’s markets.

Rachel Reeves praised Nik Storonsky’s Revolut at its new headquarters, calling his investment a “vote of confidence” in the UK economy. However, shortly after, Storonsky moved to the UAE, potentially avoiding a £3bn capital gains tax should he have sold all his stock in Revolut. Reeves is considering an “exit tax” for wealthy individuals leaving the UK, which could raise £30bn. Entrepreneurs and technology investors are dismayed by the idea, while 60% of the public supporting the tax. “Entrepreneurs are mobile and tax-sensitive,” says Henry Whorwood, managing director at tech consultancy Beauhurst. “We should encourage entrepreneurs to create jobs, not taxing jobs and scaring them off.”

Chancellor Rachel Reeves is expected to raise dividend tax rates in the upcoming Budget. The move, aimed at taxing income from wealth more similarly to earnings from work, could raise up to £2bn but may deter investment and reduce income for pensioners reliant on dividends. Critics, including Shadow Chancellor Sir Mel Stride, argue the rise would damage investment and burden investors, pensioners, and families. Dividend tax, last increased by the Conservatives in 2022, currently sits at 8.75%, 33.75%, and 39.35% for basic, higher, and additional-rate taxpayers. The Resolution Foundation has suggested lifting the basic rate to at least 16.5%. A one percentage point increase in the basic rate of dividend tax would raise around £400m, according to the Institute for Fiscal Studies. The Chancellor is also reportedly planning to cut the tax-free allowance for earnings from dividends. This currently stands at £500, having been halved from £1,000 in April 2024.

Workers earning over £75,000 may face significant tax increases if Rachel Reeves adopts a proposal from the Resolution Foundation. The think tank suggests a 2p rise in income tax alongside a 2p cut in national insurance to address a £30bn fiscal gap. The change could result in higher earners paying up to £1,745 more annually. Shaun Moore, a tax expert at Quilter, stated: “It allows the Chancellor to raise significant revenue while protecting the majority of working households.” Blick Rothenberg said a pensioner with income of £27,500 a year would pay £298 more tax a year if the basic rate went up to 22%. A pensioner who also had a rental property that took their income up £40,000 a year would be £550 a year worse off. Meanwhile, a new report from cross-party think tank Demos showed that just 20% of the public believe it is acceptable for the Government to break promises on tax, even if that’s what the country needs.

The Chancellor is under pressure from some Labour MPs as she prepares to raise income tax in her upcoming Budget. Clive Lewis told the Sunday Telegraph that Rachel Reeves is “a Chancellor without a long-term economic strategy…fighting for her survival” while Rachael Maskell warned that working people would pay more if income taxes were increased. She said: “I do think she will lose a lot of confidence and trust if she goes against what she has explicitly said [in the manifesto].” Graham Stringer agreed, while one back-bench Labour MP questioned whether Sir Keir Starmer and Reeves would be in office by Christmas. Elsewhere, a No10 source has told the Mail on Sunday that the PM is being “bullied” into introducing a mansion tax in the Budget to “buy off” Labour Left-wingers.

Nigel Green, CEO of financial advisory and wealth management firm DeVere Group, has condemned plans for a 20% exit tax on wealthy individuals leaving the UK. He argues that this tax, which could pull in around £2bn for the Treasury, would damage the country’s competitiveness and deter entrepreneurs. Mr Green said: “The Government seems determined to make the UK an increasingly unattractive place for wealth creators.” He noted a significant rise in company directors leaving the UK, with 3,790 departures since last October, and voiced concern that an exit tax would ultimately cost the Treasury more in lost economic activity than it would generate in revenue.

Rachel Reeves’s proposed limits on tax breaks for pension contributions may prevent savers from increasing their retirement pots and increase pressure on the state pension, experts warn. Analysts suggest that many employers could reduce their contributions if the Chancellor’s plans, which aim to raise £2bn annually, are implemented. A survey of Quilter clients found that if the tax benefits of salary sacrifice schemes were reduced, 25% of respondents would stop using them altogether and 19% would contribute less.

Chris O’Shea, the CEO of Centrica, has warned that rising energy costs linked to net zero could devastate smaller businesses. He points to Ofgem’s plans for an £80bn investment in the energy network, which he says could prove crippling for many businesses. Domestic customers could see a £42 rise, while businesses may face average transmission cost hikes of 70%, with some charges doubling. O’Shea stated: “These transmission costs risk significant bill increases from early next year.” A Department for Energy Security and Net Zero spokesman defended Ofgem’s approach, asserting that the regulator’s price controls “prioritise value for money for consumers while enabling this essential investment.”

John Caudwell, billionaire and Labour backer, has urged Sir Keir Starmer to reconsider the Employment Rights Bill, fearing it could deter investment in Britain. He argues that allowing employees to sue for unfair dismissal from day one would disrupt the balance between employee and employer rights. Caudwell stated: “It will drive more jobs offshore, for sure.” He also opposed scrapping zero-hours contracts, warning it could lead to higher unemployment. Despite his support for Labour, he warned that the party risks alienating business owners.

One in six employers anticipate workforce reductions due to AI over the next year, according to the Chartered Institute of Personnel and Development (CIPD). The CIPD’s latest labour market outlook survey, involving over 2,000 employers, shows that 62% expect clerical, junior managerial, professional or administrative roles to be most affected. Large private sector firms are particularly concerned, with 26% expecting headcount reductions compared with 17% in the private sector overall and 20% in the public sector. Of the firms that expect to cut roles because of AI, a quarter said they were preparing to lose more than one in 10 staff. James Cockett, a senior labour market economist at the CIPD, said: “AI has great potential for improving productivity… but it also risks leaving many people behind.”

The Government has launched an independent review into the rising number of 16–24-year-olds who are not in education, employment, or training (NEET), which is nearing 1m. Former Health Secretary Alan Milburn will lead the inquiry, which aims to uncover the causes of increasing youth inactivity – including rising long-term sickness, disability claims, and high levels of mental health and neurodevelopmental conditions among young claimants. It will also propose ways to reduce long-term welfare costs and improve employment prospects. Work and Pensions Secretary Pat McFadden described the situation as a “crisis of opportunity” and stressed the need for a sensitive but effective policy response, noting that diagnosis should not automatically determine benefit entitlement. Mr Milburn said the review will be “uncompromising,” and expose any failings in employment support, education, skills, health and welfare.

The Conservative Party has announced plans to eliminate mandatory environmental, social, and governance (ESG) reporting, claiming it hampers UK business competitiveness. The Tories say the proposed changes could save businesses approximately £300m annually, with £202m from scrapping mandatory climate related disclosures, £76.7m a year from audits and public disclosure, and £25.7m per year from the carbon reporting framework. Firms would, however, still be required to adhere to laws on the environment and protection of nature. Shadow Business Secretary Andrew Griffith said: “Some of our best firms are being hamstrung by having to report against a dense thicket of ESG metrics to be judged by self-appointed activists or regulators.”

Pensions experts have warned that the Chancellor’s plan to the tax benefits of salary sacrifice schemes risks eroding trust in pensions and could harm businesses and employment.

Retail footfall has declined for the sixth consecutive month, according to the British Retail Consortium (BRC). Total activity fell by 0.7% in October, led by drops in shopping centre and retail park footfall. BRC chief Helen Dickinson said that nervousness around the upcoming Budget had dampened consumer confidence. Retailers are hopeful that Chancellor Rachel Reeves will use the Budget to announce reforms to the business rates system by creating an upper and lower tax band for shops either side of a £500,000 valuation.

Wealth advisers reveal that high net worth individuals are increasingly turning to family offices to borrow money, whether for investments or liquidity, getting cash more quickly and skirting KYC checks.