Confidence among UK entrepreneurs has sharply declined, with only 17% advising young people to start businesses in the country. A survey by Whitestone Insight for the Jobs Foundation revealed that 78% of family business owners feel pessimistic about the economy. Many believe the Government fails to understand their challenges, with 80% expressing dissatisfaction. The looming changes to Business Property Relief (BPR) are causing further distress, as 63% find it demoralising to pass on their businesses. Matthew Elliott, President of the Jobs Foundation, pointed to the need for a radical policy shift to support entrepreneurship.

The construction sector has experienced a year-long decline, jeopardising Labour’s housing targets. According to S&P Global’s monthly survey, December marked the twelfth consecutive month of reduced output, with the second-lowest reading since May 2020. Factors such as low business confidence and rising costs have contributed to the downturn. Tim Moore, economics director at S&P Global, noted: “Delayed spending decisions were still cited as contributing to weak sales pipelines.” Analysts predict new housing starts will rise but remain below targets.

The estimated cost to business of Labour’s flagship workers’ rights reforms has been cut from about £5bn to £1bn. The Employment Rights Act provides a range of tougher employment rights on issues such as sick pay, paternity leave and the end of zero hours contracts, but plans to allow employees to sue for unfair dismissal on day one of their employment were scrapped in favour of a six month threshold following a backlash from businesses. Officials admitted, however, that the revised estimate related mainly to the administrative costs of implementing the new rules, not the impact of the changes on business models and the economy. With the unemployment rate now at 5.1%, employers remain concerned about those issues in the Bill yet to be finalised.

Companies in the UK are increasingly hiring overseas workers for back-office roles due to rising employment costs linked to tax hikes. Rachel Reeves’s National Insurance increase has made hiring British workers more expensive, leading to a surge in unemployment, particularly among young people. Alex Fenton, CEO of the Legends Agency, stated: “The Government claims it is championing young and working people, yet its anti-business agenda is producing the opposite outcome.” Shadow Chancellor Sir Mel Stride warned that these tax policies are driving jobs out of Britain and harming the economy.

Despite rising redundancies in the UK, the tech sector is experiencing significant salary growth. According to Totaljobs, median advertised pay for tech roles increased by 7.5% to over £33,500. This growth is driven by demand for skills in artificial intelligence, data, and software engineering. Python developers can earn up to £90,000, while AI software developers average around £75,000. Luke McKend, managing director at Stepstone Group, noted a “clear re-calibration” in the labour market, with two-thirds of tech workers receiving pay rises in the past year.

Gen Z is increasingly saving money due to a youth unemployment crisis, according to Oxford Economics. The savings rate for those aged 18 to 24 rose to 10.4% last year, up from 7.6% in 2019. This trend reflects economic shocks and financial insecurity. Michael Saunders, a senior adviser at Oxford Economics, noted that younger people view recent economic turbulence as the norm. The UK youth unemployment rate has risen to 15%, the highest in the G7. Overall, the UK’s household saving ratio increased to 9.5% in Q3 2025, impacting consumption levels.

Luton Airport’s £2.5bn expansion plan faces uncertainty due to rising business rates. The Labour-run Luton Council aims to increase capacity from 18m to 32m passengers by 2043. However, new tax measures could more than double the airport’s business rates bill from £7m to £14.5m by 2029. A spokesperson for Luton Airport stated that any additional tax burden would likely impact investment decisions. Karen Dee, chief executive of AirportsUK, warned that such increases could jeopardise billions in investments and thousands of jobs. The Government has proposed a £4.3bn support package to mitigate these tax hikes.

Self-assessors may face fines due to inaccuracies in HM Revenue & Customs’ (HMRC) outdated tax calculator. As the January 31 deadline approaches, over 5m self-employed workers have yet to file their returns. The calculator does not reflect recent changes in capital gains tax (CGT) rates, which increased in the 2024 Budget. Charlene Young from AJ Bell warned: “There’s a real danger here,” as many may miscalculate their CGT. HMRC stated that taxpayers have the necessary tools to ensure accurate calculations, but confusion remains regarding the adjustment process.

The Berne Financial Services Agreement came into effect on 1 January, enhancing cooperation between UK and Swiss financial firms. The deal allows firms to trust each other’s regulations, reducing costs and fostering innovation. Tim Focas, head of capital markets at Aspectus Group, says that outside the EU, Britain is able to operate on the principle of free market competition – the EU failed after years of trying to secure a deal with Switzerland “precisely because [Brussels] prioritises control over trust.” This agreement signifies a shift from regulatory empire building to mutual recognition and should be seen as “a quiet Brexit win that actually matters.”

The FT details how Lloyds Banking Group is working to disrupt home buying using blockchain, noting how Barclays, HSBC and NatWest have also been testing using tokenised deposits in transactions.

Larry Page, the co-founder of Google and the world’s second-richest person, has left California amid concerns over a proposed 5% wealth tax on billionaires. He has relocated his family office and flying car business to Delaware. The tax, aimed at funding healthcare, could cost Page approximately £13.5bn if implemented. While Governor Gavin Newsom opposes the tax, momentum is building for a referendum. Other billionaires, like Peter Thiel, are also considering leaving California, while Nvidia’s Jensen Huang expressed no concerns about the tax.