Small firms in the UK are experiencing pressures similar to those during the pandemic, according to MPs on the Business and Trade Select Committee, with rising energy costs, a complex tax system, and crime contributing to this crisis. MPs are calling for measures including a clampdown on late payments, reforms to VAT and business rates and targeted support with energy bills. It is noted that small retailers estimate that an increase in employer National Insurance is costing an extra £7bn a year. Liam Byrne, chair of the committee, said: “High streets do not die by accident. If the Government is serious about growth, it must set out a more coherent and ambitious plan for the businesses that make up so much of the UK economy.”

The Liberal Democrats have proposed dismantling the Treasury to create a new Department for Growth. This department, which would be based in Birmingham, would focus on long-term economic prosperity, business, and trade, while a separate Department for Public Expenditure would manage public spending. The Lib Dems aim to align the UK with countries like Australia and the US, where economic strategy and spending are managed separately. Deputy Lib Dem leader Daisy Cooper, said: “We want to get rid of this anti-growth Treasury,” adding: “For too long, political parties have allowed the Treasury tail to wag the political dog and it must stop.”

Latest figures from CoStar show London’s office market staged a strong recovery in 2025, as both occupiers and investors returned in force following the pandemic downturn. There were 14 new lettings over 100,000 sq ft – the joint-highest since 2017. Investor activity also surged, with 19 deals above £100m, reflecting rising rents, stronger demand, and improved lending conditions. Overall, net absorption approached 4m sq ft, marking the strongest occupancy gains since 2018 and signaling renewed confidence in London’s commercial property market.

New regulations for buy now, pay later (BNPL) will see consumers face affordability checks. The new rules will come into force from July 15 and follow the Government’s decision to bring the sector under the Financial Conduct Authority’s (FCA) regulation, a move that will mean lenders will need to be authorised by the regulator to provide BNPL products. The new rules will also allow consumers to complain to the Financial Ombudsman if issues arise and service providers such as Klarna, Clearpay and Afterpay will be subject to the Consumer Duty. Sarah Pritchard, deputy chief executive at the FCA, said the regulator wants the BNPL sector to “thrive” but is “putting in place proportionate protections for the 11m people who use it.” Currently, 11m consumers in the UK use BNPL, with the market having grown from £60m in 2017 to over £13bn in 2024.

Chancellor Rachel Reeves has called for deeper integration with the EU, calling trade with the bloc the “biggest prize” for Britain. Speaking at the London School of Economics, she highlighted that nearly half of the UK’s trade is with the EU and commented: “I strongly believe that Britain’s future is inextricably bound with that of Europe’s.” Suella Braverman, a former Conservative Home Secretary who recently defected to Reform UK, criticised the comments, saying: “The great Brexit betrayal is under way.” Accusing Labour of wanting to “row back on Brexit since day one,” Shadow Chancellor Sir Mel Stride, said: “Labour is desperate to blame anyone but themselves for their economic failures.” In contrast, Liberal Democrat leader Sir Ed Davey has backed closer ties to Brussels, calling for a new Customs Union.

Tim Flagg, head of UKAI, has warned that the UK risks missing out on AI opportunities without stronger Government support for local businesses. He emphasised the need for UK firms to access public sector contracts and compete against foreign giants and warned that there is “a gap between ambition and delivery.” Mr Flagg said that while the UK should not aim for complete self-sufficiency, it must ensure critical AI systems are resilient against geopolitical challenges. The UK has raised over £20bn in private capital for AI, but other countries like France are investing more heavily in domestic technologies.

The Government is introducing a new visa initiative to attract international AI talent, AI Minister Kanishka Narayan has announced. The move aims to address the skills shortage in the tech sector, with British Chambers of Commerce analysis showing that 71% of UK firms have invested in AI tools but 40% of small businesses lack the necessary skills to deploy and manage a shift to greater AI use. Mr Narayan said: “With a dedicated AI stream for global talent, we are going to reimburse visa fees and accelerate visa processes, alongside a domestic obsession for training British kids in AI.”

It has been suggested that Chancellor Rachel Reeves “should have been clearer” about the impact of her tax plans and a pledge to cut business rates. Following the Budget, the Conservatives complained to the Office for Statistics Regulation, an arm of the UK Statistics Authority (UKSA), that Ms Reeves’ claims were “statistically misleading.” The UKSA has now said there were “opportunities for improvements to be made to support understanding of the data and avoid the potential for people to be misled.” A Treasury spokesman said: “The Chancellor stated at the Budget that tax rates for the smallest retail, hospitality and leisure properties would be their lowest since 1991,” adding that this is “categorically true” thanks in part to a cut for 750,000 eligible properties.

New data from Zoopla shows that solo buyers in the UK can now access some of the country’s most affordable property markets, with monthly mortgage payments in certain areas cheaper than typical living costs. Sunderland and Aberdeen top the list for affordability in England and Scotland, with average mortgages of £408 and £438 per month respectively. Smaller towns like Shildon and Stevenson offer even lower entry points, with starter homes costing around £64,200-£70,650.