The UK has maintained its position as the second-most attractive destination for international investment, according to PwC’s latest survey. Both Germany and India now share this ranking, each with 13% of chief executives preferring these countries. The US remains the top choice at 35%. Despite rising economic uncertainty, with 25% of UK CEOs predicting a downturn, the UK is enhancing its global standing through trade agreements. Marco Amitrano, senior partner at PwC UK, stated: “Being the world’s second-most important investment destination for a second-year running should not be underestimated. It demonstrates that the UK still looks stable in a turbulent world. But in now sharing that position it’s also a wake-up call – other countries are gaining ground.”

The International Monetary Fund (IMF) predicts the UK economy will grow slower than the average of advanced economies over the next two years. The IMF’s World Economic Outlook report maintains UK growth estimates at 1.3% for 2026 and 1.5% for 2027, below the 1.8% and 1.7% expected for advanced economies. The Chancellor claimed the IMF report shows the UK is on track to be the fastest growing European G7 economy, but her shadow Mel Stride accused Rachel Reeves of “gaslighting the country” arguing the forecasts indicate the UK economy was flatlining.

The Labour Government faces criticism for its economic policies, with left-leaning economists urging Rachel Reeves to enhance growth strategies before the World Economic Forum in Davos. A report by the Resolution Foundation highlights that the UK lags 15% behind countries like Germany and France in GDP per head. Economists point to indecisiveness and a lack of boldness in planning reforms and capital expenditure. Greg Thwaites, research director at the Resolution Foundation, commented: “The Government must capitalise by ramping up its plans.” He stressed the need for urgent action to improve living standards.

Global stock markets faced turbulence as President Trump threatened new tariffs on allies opposing his Greenland acquisition. This raised fears of a renewed trade war, prompting investors to seek safety in gold, which reached a record high of $4,689 per ounce, up 75% this year. The FTSE 100 and FTSE 250 indices fell by 0.4% and 0.9%, respectively. Analysts at Lombard Odier warned that Trump’s actions could unite the EU and UK in retaliation. Shevaun Haviland of the British Chambers of Commerce urged calm, stating: “We are still in the foothills when it comes to these new tariff proposals.”

The audit industry is grappling with the rise of AI-driven fraud, City AM reports, noting that the industry regulator has taken a more aggressive stance over the last five years, imposing over £154m in fines on major firms. With the rise of AI, auditors will need to be even more alert. Indeed, AI is being used to detect anomalies and fraud. James Polson, audit partner at Deloitte, pointed to the heightened risk of falsified evidence due to AI advancements, nut also notes how AI can augment the audit process. Rakesh Shaunak, CEO of MHA, noted changes in how financial data is generated, while Esther Mallowah from ICAEW stressed the need for auditors to enhance their skills in communication and critical thinking to combat these emerging threats.

The Government is under pressure to lay out its plans to reform the business rates system after promising to do so before the election. Liam Byrne, the chairman of the business and trade committee, said Labour pledged in its manifesto to “replace the business rates system, not tinker with it or subsidise it.” He went on: “When is the Government going to table comprehensive radical reform that meets the test of the manifesto commitment?” The comments came as backbenchers pressured Treasury minister Dan Tomlinson to detail how the Chancellor would ease the burden on the hospitality sector.

High earners in the UK could lose up to £250,000 in pension tax relief if they fail to reclaim it by the self-assessment tax return deadline. Higher rate taxpayers can reclaim an additional 20% tax relief, while additional rate taxpayers can reclaim 25%. In a single tax year £5,000 could be lost, jumping to £89,666 after ten years, before surpassing £250,000 after 20 years. Ed Wood, Senior Financial Planner at Rathbones, stated: “Now is the time to review whether you’ve claimed everything you’re entitled to.” HMRC allows back claims for up to four tax years.

More than 5.6m taxpayers overpaid £3.5bn in income tax during the 2023/24 financial year, according to HMRC. Experts attribute these overpayments to errors in tax code issuance and complex regulations. Neela Chauhan, a partner at UHY Hacker Young, said: “Millions of people are paying the wrong amount of tax simply because HMRC is almost guessing what they earn. For too many people, this will go completely unnoticed.” She pointed to the importance of taxpayers verifying their tax codes and year-end PAYE summaries, especially those with non-PAYE income or company benefits.

Scotland’s recent Budget brought increased tax burdens on families and businesses, writes Donna Brennan, a partner at Weightmans. The Budget overlooked Scotland’s unique legal and tax position, she says leaving many Scots facing increased liabilities. Inheritance tax, based on UK-wide assumptions, does not align with Scotland’s distinct legal system and more than 1.5m Scots pay higher income tax than their UK counterparts, a situation exacerbated by new council tax bands on homes over £1m. Brennan stated: “Tax policy should support stability and growth, not undermine it.”

The Treasury committee has warned that the UK financial system faces “serious harm” due to inadequate regulation of AI technologies. In their report, MPs criticise the Government and the Bank of England for a “wait-and-see” approach, despite over 75% of City firms using AI. The lack of specific laws raises concerns about consumer safety and financial stability. Meg Hillier, chair of the committee, said: “I do not feel confident that our financial system is prepared if there was a major AI-related incident.” The committee urges regulators to implement stress tests for AI-driven market shocks.

The British Business Bank has committed £25m to Kraken Technologies, aiming to encourage the AI firm to list in London. This investment is part of a broader £1bn fundraising and demerger from Octopus Energy. Business Secretary Peter Kyle expressed hope that this backing would position Kraken as a British success. He stated: “I want Kraken to be known as a British success.” Kraken, which handles billing for half of UK households, could potentially list by 2027, depending on market readiness. The Government is also investing in life sciences and tech sectors to bolster the economy.