Financial Conduct Authority chief executive Nikhil Rathi says the City watchdog plans to enhance SME lending, reform mortgage rules, and support digital finance in a bid to boost economic growth and competitiveness. In a letter to Prime Minister Keir Starmer, Mr Rathi said the regulator will consider revising pension fee caps, accelerate company listings on the London Stock Exchange, and reduce mortgage-approval red tape. The Government has urged regulators to support growth and the FCA reforms align with ministers’ efforts to encourage pension funds to invest more in unlisted companies, early-stage ventures, infrastructure and green energy. The FCA also plans to remove the current seven-day research waiting period for IPOs.

The British Chambers of Commerce (BCC) forecasts UK economic growth at 1.4% for this year, a slight increase from 1.3% previously. However, growth is expected to slow to 1.2% next year and 1.5% in 2027. David Bharier, head of research at the BCC, said: “Our forecast suggests last month’s Budget is unlikely to be a growth game-changer for the UK economy.” He added: “The forecast paints a picture of an economy remaining stuck in low gear.” The BCC said the UK’s dominant services sector, which accounts for two-thirds of GDP, would be the fastest growing part of the economy next year, at 1.3%, followed by the construction sector (1.1%) and manufacturing (0.9%). Rising costs and political uncertainty will continue to challenge small and medium-sized firms, while unemployment is projected to rise from 5% to 5.1%.

Former Prime Minister Lord David Cameron has voiced concern over the significant exodus of British entrepreneurs and talent. This comes with Office for National Statistics data showing 257,000 Britons left the UK in 2024, a 250% increase from previous estimates. Lord Cameron emphasised the need for regulatory changes and investment to enhance the UK’s competitiveness and attractiveness. Noting that “it’s not simple,” he added: “There’s a whole range of plans and decisions that need to be put in place to make our country more competitive.”

Research for AXA Commercial shows that 77% of UK adults believe the Government should provide more support for small businesses. The poll, involving 2,000 participants, identified cuts to business rates, lower energy costs and reduced corporation tax as the measures people most want implemented to support small firms. Respondents also backed reducing red tape, simplifying the tax code, and lowering National Insurance contributions. The study also found that 62% of respondents think small businesses make an area more attractive and liveable, while 57% feel they add character.

Kunal Shah, co-head of Goldman Sachs International, has warned that uncertainty over tax and regulation is hindering small businesses, saying the concerns are causing companies to hesitate on investments and hiring. Noting the impact of the tax burden in the UK, he said the recent Budget “was a focal point for everyone to see again how tough the fiscal maths is now in the UK.” He added: “It introduces challenges for any entrepreneurs and the business environment.” Mr Shah said that while entrepreneurs are “largely optimistic around their own businesses, around things they can control,” uncertainty over wider issues “can hamper investment confidence,” warning that this “continues to be an overhang.”

Rachel Reeves has expressed frustration over a series of unauthorised leaks prior to the Budget. During a Treasury Select Committee session, the Chancellor said these leaks were “very damaging,” adding that reports which misrepresented her Budget strategy were “unacceptable.” Ms Reeves, who has vowed to prevent future occurrences, has emphasised the need for a review of Treasury processes and has engaged the National Centre for Cyber Security to examine IT systems. An investigation is underway into the source of the leaks, particularly concerning information given to the Financial Times that suggested a change in income tax plans.

Research from PwC has revealed a decline in youth employment in the UK, with the country dropping to 27th place among OECD nations. The youth unemployment rate has risen from 14.8% a year ago to 15.3%, the highest since 2015, with nearly 1m young people classified as not in education, employment, or training. This comes amid higher employer National Insurance contributions and a series of increases in the minimum wage, which make it more expensive to hire relatively low-paid staff. While the Work and Pensions Secretary, Pat McFadden, has announced a “youth guarantee” to provide 350,000 new training opportunities, business leaders warn that rising taxes and costs are hindering hiring efforts.

As Christmas approaches, HMRC has advised those earning extra income through side hustles that they should be aware of their tax obligations. The tax office has reminded earners to declare income exceeding £1,000 per tax year to avoid penalties. While selling personal items typically does not require reporting, significant sales may incur capital gains tax. According to Finder, 39% of Brits engage in side hustles, earning an average of £210 weekly.