Britain’s five largest banks – NatWest, HSBC, Barclays, Lloyds and Santander – have pledged a combined £11bn to support firms seeking to invest and expand into overseas markets, the government announced on Monday. The lending will be drawn from the banks’ own balance sheets, with UK Export Finance guaranteeing up to 80% of eligible loans to give businesses greater security. Business and Trade Minister Peter Kyle said the package aims to strengthen Britain’s export potential by enabling firms to seize new international opportunities. Officials cautioned, however, that there is no guarantee the full amount will be lent and that all loans remain subject to commercial terms. Chancellor of the exchequer Rachel Reeves stated: “Britain’s small businesses are ready to take on the world – and this £11bn commitment gives them the firepower to do it.”

James Codling, managing partner at venture capital firm Volution, has cautioned fintech firms against rushing into initial public offerings (IPOs). He suggested that companies should ensure their business models are robust before considering a float. Mr Codling noted past IPOs that were disastrous, leading to market volatility. Telling firms to “float when it’s the right time to float,” he said: “I think we need a functioning IPO market but I’d be more than happy to see our companies stay private for longer to make sure that they get to the right place before they can float.”

Susan Langley, Lady Mayor of the City of London, has voiced concern that pessimism about the UK economy is damaging the City’s global reputation. Noting that the latest PwC CEO survey shows the UK sharing second place for investment attractiveness with Germany and India, Ms Langley says the findings “underline an unavoidable truth: the rest of the world is catching up fast.” She also warned that while there are “people actively trying to undermine our reputation by pushing false narratives about London and the UK… we don’t help ourselves either.” She added that this is because “we’re very good at talking about what we’re not good at, but much slower to champion the areas where we genuinely lead: green finance, fintech, data and AI.”

A report from EY-Parthenon reveals that one-third of UK-listed retailers issued profit warnings last year, with this the fourth consecutive year that warnings came in at this proportion or higher. Fifteen FTSE retailers reported warnings, with a notable increase in the second half of the year. Silvia Rindone, EY-Parthenon’s UK and Ireland retail lead, said: “Changing consumer behaviour is continuing to make the trading environment challenging.” Overall, 240 profit warnings were issued across all sectors, with geopolitical uncertainty cited as a major factor. Data shows that 17% of the businesses issued at least one profit warning, just less than the 18% recorded  in 2024. Jo Robinson, an EY-Parthenon partner, said the data shows that “the pace of UK profit warnings has slowed, but this feels more like an uneasy pause than a turning point.” She added: “Many firms continue to face a challenging and uncertain backdrop.”

The hospitality sector in Britain is facing significant challenges, with four businesses closing daily. According to the NIQ Hospitality Market Monitor, the number of food and drink venues decreased by 0.4% between October and December 2025, resulting in a net loss of 382 businesses. Industry leaders have warned that without comprehensive support, closures and job losses will escalate. UKHospitality forecasts that 963 restaurants, 574 hotels, and 540 pubs could close in 2026 without support. This comes ahead of an increase in business rates which will apply to all hospitality businesses with the exception of pubs.

AI is causing significant job losses in the UK, according to research by Morgan Stanley. The study found an 8% net reduction in roles over the past year, which is double the average in other countries. UK businesses reported that 23% of roles were eliminated or not back-filled, while only a 15% increase in new roles was created. Mid-career professionals were most affected, with it found that they were facing job losses but also seeing opportunities for retraining. Overall, UK productivity increased by 11% due to AI investments, but job vacancies have declined by a third since 2022.

Andy Haldane, former chief economist of the Bank of England, has voiced concern that the Government lacks anyone with a “nose for business,” telling LBC that ministers have “no sense of what works.” Highlighting the impact of U-turns by the Government, he said: “Business rates is a case in point. They haven’t fully fathomed the consequences for business before they’ve announced and that’s been a big mistake.” Mr Haldane also said the UK economy is still “flying below its cruising altitude.”

The Government has launched the Defence Office for Small Business Growth to assist SMEs in securing defence contracts. Luke Pollard, Minister for Defence Readiness and Industry, said that SMEs are the “backbone of UK defence.” The new office aims to reverse the decline in Ministry of Defence spending on SMEs, targeting a 50% increase to £7.5bn by 2028.

Reform UK’s new Scottish leader, Malcolm Offord, believes “workers and owners in Scotland are paying too much tax,” and says the party would reduce income tax bands from six to three if elected. Voicing concern that Scotland’s current tax structure is unrepresentative and burdensome, particularly for higher earners, he said Reform would aim to cut rates by 1p immediately and an additional 3p over the parliamentary term. This would cost £3.7bn and the plans would be partly funded by £2bn in savings from public spending, with Mr Offord warning that his tax plans would require cuts to economic development budgets. The Scottish Conservatives have already called for income tax cuts and Scottish Labour says it aspires to reduce the tax burden.

A survey by Travel Counsellors reveals that AI is empowering young adults in the UK to pursue entrepreneurship. The research shows that 53% of respondents have considered entrepreneurship and approximately 36% of 25 to 34-year-olds and 32% of 16 to 24-year-olds feel encouraged to start their own businesses due to AI. Key attractions include the potential for higher earnings (34%) and improved work-life balance (28%). However, barriers such as lack of finance and fear of failure persist.