Pubs and music venues in England will be given a 15% discount on their business rates bills from April and will not see increases for two years. It comes after a backlash against November’s Budget, which left many facing major increases in their business rates bills, and led to more than a thousand pubs banning Labour MPs from their premises. This came alongside a hike in the minimum wage and an increase in employer national insurance contributions. Announcing the changes, Treasury minister Dan Tomlinson said: “Pubs are the cornerstone of so many communities, they are essential to the social and cultural life of so many places across the country.” The Government also promised to review how pubs are valued by the Valuation Office Agency (VOA), ahead of the next revaluation of premises in 2029. The shadow chancellor Sir Mel Stride said the whole of the retail, hospitality and leisure sectors should have their rates cut while the Liberal Democrats labelled it a “half-hearted” U-turn. Kate Nicholls, the chair of UKHospitality, added: “The rising cost of doing business and business rates increases is a hospitality-wide problem that needs a hospitality-wide solution.”

UK-listed companies issued a record number of profit warnings last year, with 240 firms alerting investors to falling profits, according to EY. Notably, 42% of these warnings cited policy and geopolitical uncertainty as key factors. This marks a significant increase from just 12% in 2024. The retail and tech sectors were particularly affected, with 23 warnings from retailers and around 30 from software and computer services. EY partner Silvia Rindone noted that retailers are concerned about consumers delaying purchases and becoming more selective.

Sir Keir Starmer has begun a three-day visit to China – the first by a UK prime minister in eight years – as he seeks to reset relations with Beijing and reduce Britain’s reliance on the United States. The trip will focus on strengthening trade and investment ties, with Starmer telling Bloomberg that China offers “significant opportunities” for British businesses and insisting the UK would not be forced to choose between Washington and Beijing. Business leaders from banking, financial services, and manufacturing, including Rolls-Royce, are accompanying the delegation.

The Financial Conduct Authority (FCA) has initiated a review into the impact of artificial intelligence (AI) on retail financial services. Sheldon Mills, an outgoing FCA executive, will explore how AI could reshape markets and consumer behaviour. While AI may enhance financial management, Mills warned of potential risks, including biased decision-making and increased fraud. He said: “It could introduce new risks if decisions are increasingly delegated to AI agents.” The FCA anticipates a future where AI agents handle payments and claims, highlighting the need for regulatory adaptation in a rapidly evolving landscape.

The Bank of England has highlighted the urgent need for enhanced regulation of the shadow banking sector, which Governor Andrew Bailey says poses potential risks to financial stability. Writing in The Banker magazine, Bailey asserts that regulators must not become complacent after improving traditional banks’ resilience post-2008. He noted that market-based finance, which includes activities by non-banking institutions, is growing rapidly and remains complex and opaque. A stress test of private markets is planned to assess potential risks.

The British Retail Consortium (BRC) reported a year-on-year inflation rate of 3.9% for food prices in January, up from 3.3% in December. This increase is attributed to rising energy costs and higher national insurance contributions, which retailers struggle to absorb. Helen Dickinson, BRC chief executive, stated: “Any suggestion that inflation has peaked is simply not borne out by these figures.” The report indicates that inflation in non-food items remains low at 0.3%, while cautious consumer spending may lead retailers to extend discounts.

Shares in Britain’s banking sector helped lift the FTSE 100 index on Tuesday, which rose 0.2% to 10,171.55p. HSBC led the gains, climbing over 2% to an all-time high of 1,270.60p. NatWest also saw a rise of 1.4% to 659.40p, while Lloyds and Barclays increased by nearly 1% and 1.2%, respectively. The banking sector’s performance comes ahead of the full-year earnings season starting Thursday.

More than 70% of UK teens and young adults express anxiety about starting their careers, according to the King’s Trust survey. The study, which involved 4,097 respondents, revealed that 73% are concerned about job availability. Jonathan Townsend, UK chief executive of the King’s Trust, said: “This new research shows young people today are deeply concerned about their job prospects.” Additionally, 59% worry about the impact of artificial intelligence on job security. The report highlights a generation facing economic uncertainty and inadequate preparation for the labour market.

January has become the top month for holiday bookings among Brits, with one in three travellers planning trips early. However, Steve Heapy, CEO of Jet2, warns that rising taxes are causing many to delay their summer holiday plans. He noted that customers are waiting for last-minute discounts due to lower disposable income. The Chancellor’s recent Budget extended a freeze on tax thresholds and increased Air Passenger Duty, further impacting holiday decisions.