Civil servants are discussing strategies to attract wealthy investors to the UK after an exodus of high-net-worth individuals spooked by the abolition of non-domiciled tax status. Business Secretary Peter Kyle is preparing initiatives to enhance the UK’s appeal to entrepreneurs, including a “global investor visa” scheme. This would see individuals pay a fee of £200,000 a year and commit to invest £2.5m in the UK. In return, they would be exempt from UK tax on foreign income for up to 15 years and avoid inheritance tax on foreign assets. Tim Sarson, UK head of tax policy at KPMG, said: “The Government is listening to ideas that might make us more attractive and stop the noise about people going off to Dubai and elsewhere. They are looking at ideas for competitiveness [on tax].”

Rachel Reeves is under pressure from Labour MPs to extend a proposed business-rates bailout beyond pubs to include hotels, restaurants and high-street businesses. Ministers are examining support for pubs, which face average rate rises of 76% by 2030, but MPs warn other hospitality sectors face sharp increases too. Restaurants could see rises of 17% and self-catering accommodation 23%, according to UKHospitality, following new valuations by the Valuation Office Agency. The withdrawal of Covid-era discounts from April is worsening pressures. Labour backbenchers argue limiting help to pubs risks undermining wider high streets, while Conservative shadow business secretary Andrew Griffith says any U-turn should be far broader.

Experts warn that Rachel Reeves may need to raise taxes due to a potential tax shortfall caused by declining migration numbers. Predictions suggest net migration could fall to zero or even negative by year-end, significantly impacting revenue. Charlie McCurdy from the Resolution Foundation said: “If predictions that net migration to the UK turns negative by next Christmas…there would be serious consequences for the public finances.” The drop in net migration is thought to be caused by a reduction in visas granted for skilled workers combined with a surge in people emigrating.

Research by Moore UK found 19% of entrepreneurs intend to pass on their firms to their children within five years to reduce their tax bill. However, head of Moore UK Mark Lance warned this could backfire if the new owners are unprepared to run them.

The Observer reports on how the US removed itself from the OECD’s tax scheme, leaving American companies exempt from the 15% global minimum tax. Caitlin Boswell at Tax Justice UK appears to lay the blame at the Labour Government, saying: “The UK Government has agreed to give multinational companies from the USA a free ride by exempting them from paying a global minimum corporate tax. Worst of all, they’re not even letting us know how much it will cost us in forgone tax receipts.”

Optimism among UK businesses dropped to the lowest level in nearly five years at the end of 2025, according to a survey by BDO. The firm’s monthly measure of sentiment fell from 93.45 to 90.01 in December – the weakest level since January 2021. Scott Knight, the head of growth at BDO, said: “Business costs are rising and turnover expectations are falling; it’s no wonder that optimism is on the floor. Decisive action like further interest rate deductions and a clear roadmap of what’s ahead is critical.”

Britain’s industrial sector faces a severe crisis, with energy-intensive industries operating at half their 2000 output. Employment in these sectors has plummeted from over 800,000 to under 414,000. Rising energy costs, driven by government policies and global competition, have exacerbated the situation. Rian Chad Whitton, an analyst at Bismarck Analysis, argues in his report, Destroying the Foundations, that urgent action is needed. He suggests removing Net Zero-related levies from energy bills and lowering the effective tax rate on oil and gas production to revive the foundational industrial economy – which includes extraction and energy-intensive manufacturing. “Policymakers must treat their survival as a national priority,” he says.

Labour’s commitment to Net Zero could impose a staggering £4.5trn burden on Britons over the next 25 years, according to the National Energy System Operator (NESO). This includes £585bn from households transitioning to eco-friendly heat pumps and £1trn for new wind farms. Critics, including Reform UK’s Richard Tice, argue that these costs could bankrupt the economy. Tice said: “The Government’s obsession with Net Zero will only succeed in bankrupting the country.” The total annual expenditure needed to meet targets by 2050 is estimated at £182bn.

British manufacturers are nearing an investment “tipping point” due to rising business costs, according to a survey by Make UK and PwC. Nearly 90% of 174 executives expect employment costs to rise this year, while 66% anticipate increased energy costs. About 65% view growing costs as a significant risk, potentially leading to cancelled or relocated investment plans. Despite this, many remain cautiously optimistic, with 57% believing the UK is still competitive for manufacturing. Stephen Phipson, chief executive of Make UK, said: “The warning lights are now flashing red…the Government promised significant change – now is the time to deliver it.”

The UK’s jobs market showed a decline in December, with both permanent and temporary positions falling. The KPMG and Recruitment and Employment Confederation (REC) survey indicated a four-month low in permanent placements and a rise in worker availability. Neil Carberry, REC chief executive, noted that business confidence must improve for hiring to recover. The unemployment rate reached 5.1% in Q4, the highest in four years, with predictions of it rising to 5.5%. Jon Holt, group chief executive of KPMG, said: “The jobs market is still signalling caution…[bosses] who have been prioritising increased investment in tech to improve resilience and productivity will be looking for signs of greater confidence in the wider economy before turning the hiring taps back on.”

The Prime Minister has announced significant reforms to parental leave as part of Labour’s workers’ rights package. Starting from an employee’s first day, unpaid parental leave will be available, benefiting 1.5m parents, along with the right to statutory sick pay. Additionally, bereaved partners will gain up to 52 weeks of paternity leave if they lose their partner before their child’s first birthday. Sir Keir Starmer said: “The changes we’re bringing in will mean every new parent can properly take time off when they have a child, and no one is forced to work while ill just to make ends meet.” The reforms are part of the Employment Rights Act, which received Royal Assent in December.

The UK economy is expected to have grown by 0.2% in November, following a recovery in car production after the Jaguar Land Rover cyber attack. Economists from Pantheon Macroeconomics and Investec noted that this growth comes after two months of decline. Rob Wood and Elliott Jordan Doak stated: “All told, we think the economy continued to chug along in November, despite months of pre-budget uncertainty.” While hospitality spending showed a 3.1% increase, retail sales volumes dipped by 0.1%. The upcoming Office for National Statistics data will provide further insights into consumer and business confidence.

The Sunday Times reports on the growth of risk consulting with the market growing by $52bn to $160bn between 2020 and 2025. But questions abound over whether the Big Four can maintain their hold on the risk market after decades of dominance, as competitors create specialist geopolitics arms with former insiders and senior politicians on board. “The Big Four are accountants at heart,” explains James O’Dowd, founder of Patrick Morgan, an executive search firm for professional services. “Geopolitical risk needs multifaceted teams – international relations, foreign policy, sector specialists.” Big Four pay packages, too, tend to be lower than remuneration at the likes of McKinsey and BCG. The paper’s Daniel Woolfson concludes: “When it comes to risk, the Big Four remain formidable. But, as the boundary between risk and grand strategy blurs, rivals big and small are clearly nipping at their heels.”

Older Britons express significant dissatisfaction with the economic system, according to a survey by Apella. The poll revealed that 45% of voters aged 56-64 believe the system is “broken” and needs replacement, compared to 34% of those aged 18-29. Pessimism is also higher among older voters, with 62% of those aged 55-64 feeling the system is stacked against them. James Kirkup from Apella noted: “Many people in their 40s and 50s feel they’ve worked hard for decades but aren’t seeing any rewards.” The survey highlights a growing demand for radical economic change among older demographics.