Business leaders concerned over tax hikes

Senior business leaders are urging the Government to refrain from increasing employment costs in the upcoming Budget. A report by Employment Hero shows that 86% of 1,000 corporate leaders surveyed are concerned about potential tax hikes. If costs rise, 49% may raise prices, risking further inflation. Additionally, 33% would delay hiring, and 24% might consider redundancies. Over half of those polled said they believe the Government overlooks small businesses’ needs. Kevin Fitzgerald, UK managing director of Employment Hero, said: “When you tax small businesses, you tax everyone.” He added: “Small businesses employ the majority of our workforce. Make life harder for them, and you make it harder for Britain to grow.”

Retailers see slower sales growth

Retail sales growth in the UK slowed to 1.6% in October, down from 2.3% in September, according to the British Retail Consortium (BRC) and KPMG. Food sales growth decreased to 3.5%, while non-food sales remained nearly unchanged at 0.1%. Helen Dickinson, BRC chief executive, warned that “looming Budget decisions risk undermining fragile consumer confidence,” adding that the Chancellor “should use the Budget to remove this threat and help curb inflation for businesses and families.” Elsewhere, Barclays reported that consumer confidence has fallen across all seven measures tracked, with household financial confidence dropping from 74% to 63%.

Reeves: Keeping tax pledge would mean ‘deep’ spending cuts

Rachel Reeves has indicated that the Budget could deliver tax increases, contradicting Labour’s manifesto promises. In an interview with BBC Radio 5 Live, the Chancellor suggested that the only way she could keep a promise not to increase income tax, National Insurance or VAT was to cut investment – something she has ruled out. Warning that the Government’s fiscal situation is “significantly worse” than anticipated, she said: “Last year I had to address the black hole in the public finances. This year we have had the new challenge of the Office for Budget Responsibility downgrading growth forecasts.” She added that while it “would of course be possible to stick with the manifesto commitments … that would require deep cuts in capital spending.” With the Budget approaching, Ms Reeves is looking to address a black hole in the public finances estimated at between £20bn and £40bn.

IHT changes may be coming

Experts warn that changes to Inheritance Tax (IHT) could be announced in the Budget. Reme Holland from Albert Goodman highlights potential changes, including capping gift values and removing the taper on gifts made within seven years. Financial advisers at Hargreaves Lansdown have seen a surge in IHT planning requests, driven by speculation about new rules. Adam Kemp, a chartered financial planner at the firm, notes that IHT contributed £4.4bn to the Treasury in the first half of the tax year, £100m more than last year.

Investors eye exit over taxes

A survey by investment service Wealth Club has found that 86% of investors with assets over £1m are contemplating leaving the UK due to high taxes. Nearly half of these individuals also cited slow economic growth as a reason for their potential move. Many expect to save at least £100,000 in taxes during their first year abroad, with 8% anticipating savings exceeding £500,000.

Chancellor set to cut tax breaks on pensions

Rachel Reeves, the Chancellor, plans to cap tax-free salary sacrifice contributions at £2,000 annually. Workers exceeding this limit will incur national insurance (NI) charges of 8% for earnings below £50,000 and 2% for higher earnings. This change will also affect employer contributions, which currently avoid a 15% NI tax. According to RSM, a high earner sacrificing 20% could face an additional £460 in personal costs, while their employer may pay £3,450 more.

New exchange aims to revive growth companies

A group of City executives are raising funds as they look to launch a new small-cap market. Jon Prideaux, the former chief executive of mobile payments company Boku, and former AIM chief executive Martin Graham are leading the launch of the Global Growth Market (GGM), a new exchange aimed at attracting venture capital for growth companies. They are seeking £4m to fund the GGM’s technology platform and licensing with the Financial Conduct Authority. The GGM aims to eliminate fund management fees, providing half of the capital needs for eligible companies. The initiative targets over 30,000 late-stage venture companies, valued at $4trn, currently unable to access public markets efficiently. Mr Prideaux said: “Public markets stopped working for growth companies years ago.”

Bank of England softens stablecoin stance

The Bank of England has revised its approach to stablecoins in a new consultation paper, aiming to capture a share of the £200bn market. The Bank has softened its previous stance, allowing issuers to use 60% of cash from coin sales to buy short-term UK Government debt, generating interest. Previously, every coin had to be backed by a pound of assets and an ability to keep a portion of those assets as cash for immediate redemption. While officials confirmed plans to cap the amount of stablecoins that people can own at £20,000 for individuals and £10m for businesses, retailers and cryptocurrency exchanges will be exempt from the “temporary” limits. Andrew Bailey, Governor of the Bank, said: “We are designing a regulatory regime for stablecoins that is fit for the future. Use of regulated stablecoins could lead to faster, cheaper retail and wholesale payments, with greater functionality, both at home and across borders.”

AI firms drive tech valuation surge

The combined valuation of the world’s top 100 private tech firms has surged by 44% to nearly $3trn, driven by a strong demand for AI-focused businesses, according to PwC. AI companies now represent 43% of this total, surpassing fintech for the first time. Despite concerns over an overheating market, Kat Kravtsov, capital markets director at PwC UK, said: “The availability of private capital… has provided a solid foundation for the growth of the world’s most valuable unicorns.” However, fears of an AI bubble are rising as public market investors question sustainability in the sector.

Growth expectations stall

The UK economy is projected to grow by only 0.2% in the third quarter of 2025, according to a Bloomberg poll of economists. This marks a significant slowdown from the 1% growth seen in the first half of the year. Analysts attribute this decline to uncertainty surrounding the upcoming Budget, with Chancellor Rachel Reeves expected to raise £30bn in taxes. Deutsche Bank’s Sanjay Raja noted that Government spending could provide some support, while HSBC’s Emma Wilks expressed cautious optimism about stabilisation, saying that “the bar is low for good news on the UK economy.”

Budget risks talent exodus, warns Lloyd-Webber

Theatre impresario Andrew Lloyd Webber has warned that a tax-raising Budget may drive young British entrepreneurs abroad. He said: “In all the clamour about non-doms and the rich fleeing the UK’s tax regime, the most important leavers have been ignored. They are the young British entrepreneurs and wealth creators who sadly see no future for them in this country.” Baron Lloyd-Webber added: “They may not have fortunes today, but even if there’s only one budding Elon Musk among them, the potential revenue lost to the Exchequer is alarming.”