Small businesses could boost the UK economy by £60bn if the Budget addresses their needs, according to the Barclays Business Prosperity Index. Research indicates that small and medium-sized enterprises (SMEs) are cautious, with a 1.9% decline in cash inflows in Q3, while savings increased by 6.1%. The survey of 1,000 executives revealed that 55% have paused their investment strategies due to economic uncertainty, which has risen by 7% over the past year. Despite this, 80% of SMEs are likely to invest if supportive measures are introduced. Matt Hammerstein, CEO of Barclays UK Corporate Bank, stated: “This is a defining moment to provide policy stability that builds confidence among the business community.” Separate research from Shawbrook calls for greater government clarity in the Budget for mid-sized businesses, most of which say government policy favours early-stage start-ups or large corporate entities.

UK businesses are increasingly distancing themselves from China due to rising geopolitical tensions. Over half of firms are adjusting their supply chains, with 20% already relocating closer to the UK. Data from Santander indicates that 40% of UK firms have depended on China for supplies since 2023. Concerns about China’s potential to weaponise its trade dominance have prompted companies like Tesla and General Motors to seek alternatives. Jane Galvin, head of corporate clients at Santander UK, commented: “Ambitious UK businesses are determined to grow, but they face a challenging mix of geopolitical instability and weak domestic growth.”

Insolvencies in the UK increased by 1.7% in October, with a significant year-on-year rise of 16.7% compared to October 2024, according to the Insolvency Service. A total of 2,029 companies filed for winding up, including 301 compulsory and 1,592 voluntary liquidations. Matthew Richards, head of restructuring at Azets, noted that rising costs and political uncertainties are pressuring businesses. He said: “The prospect of a future recession is a real and serious one.” Simon Edel from EY-Parthenon urged companies to focus on strengthening liquidity to ease debt pressures.

More than 90% of London business leaders worry about potential tax increases in the upcoming Budget, according to a survey by the London Chamber of Commerce and Industry (LCCI). Half of the firms indicated they might freeze pay, pause bonuses, or halt hiring if taxes rise. Additionally, 70% support tax cuts to encourage hiring and investment. LCCI CEO Karim Fatehi said: “This survey sends a clear and urgent message: businesses are already under immense pressure.” He urged the Government to create conditions that allow firms to thrive and compete globally.

Concerns over potential tax changes in the upcoming Budget are causing a slowdown in commercial borrowing, according to Atom Bank’s Q3 survey. A significant 92% of brokers reported that their clients are worried about property tax and Capital Gains Tax changes, with 53% expressing strong concern. Consequently, 41% of brokers noted clients delaying investment decisions. Tom Renwick, head of business lending at Atom Bank, stated: “Demand from business borrowers seems to have plateaued… some business owners are understandably opting to pause their plans.” Brokers believe that new tax incentives could revive borrowing interest.

Investors sold off UK stocks in November at the fastest pace since the Liz Truss mini-Budget in October 2022. According to Bank of America, fund managers offloaded British stocks in anticipation of Rachel Reeves’s Budget. A survey by the bank found only 3% of fund managers expect the FTSE 100 to outperform global markets next year, compared with 37% for emerging markets.

The Society of Pension Professionals has warned that forcing pension schemes to increase payments for pre-1997 service could lead to insolvencies among sponsors. The proposed legislation may impose unfair costs on companies, risking their financial stability and potentially pushing them into the Pension Protection Fund. Jon Forsyth, chair of the society’s defined benefit committee, said: “Imposing an obligation to pay pre-1997 increases retroactively… would present substantial challenges.” The society believes that pre-1997 indexation should remain a negotiable issue rather than a legislative requirement.

Nearly 40% of savers may reduce pension contributions if the Government limits salary sacrifice schemes, according to new research by the Association of British Insurers. Rachel Reeves, the Chancellor, is considering a £2,000 cap on tax-free contributions, which could lead to higher National Insurance costs for both employees and employers. Yvonne Braun, ABI’s director of policy, commented: “This isn’t just a problem for lower earners – the Government’s own data shows middle and higher earners are most at risk of falling short of an adequate retirement income.”

The Office for National Statistics (ONS) has published a major revision of its immigration and emigration data, showing the number of British nationals leaving the country last year was three times higher than originally thought. Some 257,000 Britons left in 2024, up from the 77,000 originally stated. This means the total net migration figures for 2024 have been revised down to 345,000, lower than the 431,000 previously stated. Andrew Griffith, the shadow business secretary, said: “Labour’s economic exodus is in full flight as people flee Rachel Reeves’s tax hikes and mismanagement. It’s potentially the biggest reverse migration in British history. This was entirely predictable: when you tax something, you get less of it, and now people are voting with their feet.”

Research by Which? reveals that popular AI chatbots, including ChatGPT and Copilot, provide misleading financial advice. Tests showed that these tools suggested breaching HMRC investment limits and provided incorrect information on travel insurance. Kathryn Boyd, a business owner, noted that ChatGPT gave her outdated tax advice, saying: “It just gave me all the wrong information.” The Financial Conduct Authority warns that advice from these AI tools lacks regulatory protection. Google and Microsoft acknowledge the need for users to verify AI-generated content.