UK mergers and acquisitions (M&A) activity fell by 8% to £162.2bn in 2025, according to a Mergermarket report. The decline contrasts with increases in France and Italy, where deal volumes rose by 18% and 23%, respectively. Lucinda Guthrie, head of Mergermarket, noted that uncertainty surrounding Rachel Reeves’s Budget and Donald Trump’s tariffs led to companies delaying takeover plans. Despite a healthy pipeline of 248 active deals, investor confidence suffered, with over £10bn withdrawn from global stock markets in six months. Guthrie stated: “Uncertainty is just the worst thing for mergers and acquisitions.”

FRP Advisory anticipates increased demand for restructuring services as retailers and hospitality businesses struggle following the recent Budget. The firm, which oversaw the administration of 87 businesses in the first half of its financial year, reported a 12% revenue increase to £87.1m. Chief executive Geoff Rowley said: “We haven’t yet entered into a period of genuine economic confidence.” He highlighted that higher business rates and minimum wage increases will particularly impact consumer-facing sectors. FRP’s pre-tax profit rose to £18.3m, with an interim dividend increase of 5% planned for March 20.

Consumer confidence improved in December, rising to minus 17 from minus 19, according to GfK. The increase suggests families thought the Budget wasn’t as bad as expected, despite a £26bn tax hike. Neil Bellamy, consumer insights director at GfK, noted: “It’s tempting to see festive cheer in December’s two-point improvement.” However, the index remains unchanged from December last year, indicating persistent challenges. Elsewhere, Alex Baldock, the CEO of Currys says confidence is down with shoppers “tightening their belts” on electrical products. Baldock warned that higher household taxes were hitting sentiment and the Employment Rights Bill would bring further pain for retailers.

The Bank of England has cut interest rates by a quarter point to 3.75% in response to a weakening labour market and slowing inflation. The Monetary Policy Committee (MPC) voted 5-4 in favour of the cut, marking the first reduction since August. Governor Andrew Bailey noted that rising unemployment and lower growth indicated economic slack, outweighing inflation concerns. He said: “We’ve passed the recent peak in inflation and it has continued to fall.” The Bank expects inflation to reach its 2% target by the second quarter of next year. “This is a cautious cut,” said Michael Saunders, a senior adviser at Oxford Economics and former MPC member. “Further easing is likely to be gradual and is not guaranteed.”

Thousands of hospitality businesses risk losing Covid-related insurance compensation due to a looming deadline. Industry leaders and UKHospitality have urged the Financial Conduct Authority (FCA) to extend the business interruption claims deadline by two years. Currently, fewer than 50,000 claims have been accepted from an estimated 370,000 eligible policies. Aaron le Marquer from disputes firm Stewarts stated: “It is vital that adequate time is now allowed for the latest court decisions to be implemented.” The groups warn that without an extension, many businesses may be left without compensation.

The Financial Conduct Authority (FCA) is enhancing its efforts to improve standards in the home and travel insurance markets following a super-complaint from Which? The FCA plans to review claims handling and customer service over the next year. It aims to boost consumer understanding of insurance products and ensure firms provide accurate information at the point of sale. Graeme Reynolds, FCA’s director of competition, stated: “We will be monitoring consumer outcomes and will continue to hold firms and their senior leaders to account for making improvements.” The FCA’s actions follow concerns about low claims acceptance rates in these markets.

Sir Jim Ratcliffe, the founder of Ineos, has condemned the UK Government’s carbon tax as “the most idiotic tax in the world.” His remarks followed the announcement of over £120m in government support to save the Grangemouth ethylene plant, which protects around 500 jobs. Ratcliffe stated that while the support is a positive step, the Government must eliminate carbon taxation to foster home production and investment. He pointed to the need for a competitive energy strategy and highlighted the importance of the North Sea’s resources for the UK economy.

Investors are being called to invest billions in the UK defence sector through a new initiative from lobby group CityUK led by General Sir Richard Barron. The Defence and Resilience Group (DRG) aims to overcome barriers to private investment in the Armed Forces. It will focus on funding defence and dual-use start-ups, as well as infrastructure. Sir Richard stated that the UK needs to spend approximately £68bn to modernise its military capabilities. Last week, Nikhil Rathi from the Financial Conduct Authority said that mobilising defence investment would be one of the agency’s priorities.

Charlotte Keenan, head of corporate engagement international at Goldman Sachs, reflects on her career in the City of London. She began as an investment banker at JP Morgan Cazenove and later joined Goldman Sachs. Keenan stresses the importance of supporting small businesses, stating: “It can feel set up for the big players.” Her proudest moment was celebrating the 15th anniversary of the Goldman Sachs 10,000 Small Businesses UK programme, which has generated £2.7bn in additional revenue and created around 41,000 jobs. She remains optimistic about shaping policies for small businesses in the future.