Business confidence in the UK has dropped to its lowest level in three years, according to the ICAEW. The organisation’s Business Confidence Monitor index fell to minus 11.1 in Q4 2025, meaning it has fallen in six consecutive quarters and is now at the lowest point since Q4 2022. A record 64% of surveyed firms cited the tax burden as a “growing challenge,” up from 6% in 2020. Additionally, over half of businesses reported that regulation hindered their performance, with this marking the highest proportion in 7 years. ICAEW economics director Suren Thiru said: “The economic mood darkened considerably at the end of last year as a triple whammy of soaring costs, a crushing tax burden and slowing sales drove another disheartening drop in overall sentiment.”

Jamie Dimon, CEO of JPMorgan, has warned global markets against underestimating risks, highlighting concerns over “complex geopolitical conditions, the risk of sticky inflation and elevated asset prices.” Amid concern that there will be a correction following an AI-driven market boom, Mr Dimon said: “Most people involved won’t do well. Some of the money being invested will probably be lost.”

Peter Kyle, the Business Secretary, believes British start-ups require protections against foreign acquisitions, saying: “We must protect promising start-ups from being swallowed up by foreign competitors.” Mr Kyle, who will address business leaders in London, will set out plans to slash red tape, remove burdensome legislation, and drive investment in frontier industries. He will also highlight that the Government’s industrial strategy has generated billions of pounds in new investment commitments and created tens of thousands of jobs since its launch last summer.

Tim Dier, a Research Fellow at the Centre for Policy Studies, warns that the Employment Rights Act poses significant challenges for SMEs. While the Department of Business and Trade estimates that a 1% annual growth in SMEs could add £320bn to the economy by 2030, Mr Dier warns that excessive red tape and complex regulations hinder this growth. Calling for deregulation, he argues: “Big government has become carbon monoxide for SMEs.”

The government has dropped plans to require workers to enrol in a digital ID scheme to prove their right to work, shifting from a previously mandatory approach to an optional one. While right-to-work checks will be fully digital by 2029, ministers say the policy will now focus more broadly on improving access to public services rather than clamping down on illegal working. A government source commented: “Stepping back from mandatory use cases will ­deflate one of the main points of ­contention. We do not want to risk there being cases of some 65-year-old in a rural area being barred from ­working because he hasn’t downloaded this app.”

Anxiety over taxes has reached a record high among retail investors in the UK, with nearly 50% of investors expressing concern about the impact of taxes and government policies on their portfolios. This figure has risen from 33% since June. The Budget introduced significant tax changes, including an income tax threshold freeze until 2031 and increased dividend taxes from April 2026. Chris Beauchamp, chief market analyst at IG, said: “In recent years, across different governments, we’ve seen dividend tax hikes, reductions in capital gains allowances, and frozen income tax thresholds. Investors are naturally worried that this trend is going to continue.” While fears over tax have risen, fears over ongoing geopolitical conflicts and those related to political uncertainty were still cited as more significant concerns. Investors also noted increased anxiety over the state of the economy and government debt.

Nearly 77% of Brits expect tax rises this year, according to a City AM/Freshwater Strategy poll. Concerns about the cost of living dominate, with 71% pessimistic about their finances. The poll shows that 84% of voters fear that increased taxes will harm the UK economy.

The Scottish government has introduced modest tax cuts for low earners, raising the thresholds at which people earning less than £33,500 a year will pay income tax by 7.4%. Finance Secretary Shona Robison announced that from April, 55% of taxpayers in Scotland will take home more than those in the rest of the UK. Employees earning over £35,000 will continue to pay more than in the rest of UK. The thresholds for higher tax rates will be frozen for three years from April. The move will take the number of people paying Scotland’s three highest tax rates to more than a million by 2030. Meanwhile, Dividend taxes were increased, with a two percentage point rise to be introduced for both basic and higher rate tax payers from April 2026.

Chief executives are facing “mounting pressure” and “increasingly bearing the weight of that accountability alone,” according to a study by AlixPartners. The survey of 3,200 executives across 11 countries revealed that 70% of CEOs are facing pressure from high levels of disruption or challenges to their businesses, while less than 40% of their C-suite colleagues share this sentiment. In the UK, over 40% of CEOs believe their leadership teams lack the agility to keep pace with their competitors. Warning of a “growing disconnect” at the top of businesses, Rob Hornby, co-CEO of AlixPartners, said: “Today’s CEOs are full-time stakeholder managers, grappling with a relentless and increasingly complex wave of disruptive forces.”

Richard Hughes, former chair of the Office for Budget Responsibility (OBR), says Chancellor Rachel Reeves’ fiscal rules lack resilience. Warning that the current rules are “among the loosest” in UK history, allowing a budget deficit of around 5% of GDP, Mr Hughes argued that they fail to prepare the UK for economic shocks. He told Lords on the Economic Affairs Committee the rules “are providing the Government the capacity to run a quite significant structural deficit.” He also noted that the rolling nature of the rules provides governments with excuses to avoid immediate fiscal responsibility. Mr Hughes, who resigned from the OBR in December after its Budget forecasts were mistakenly published early, has also suggested that an independent body should scrutinise election manifestos to give the electorate a better understanding of what “they’re actually voting for.”

Tower Hamlets Council is exploring the idea of keeping its leisure centres open until 2am to cater to shift workers and younger adults. The proposal, part of the draft budget for the 2026-27 financial year, aims to increase access to facilities like badminton and fitness studios. While the extended hours could cost the council £250,000, they anticipate generating £300,000 in new income.