UK unemployment has reached 5.2%, the highest level since early 2021, according to the latest labour market data. The jobless rate increased from 5.1% in the previous quarter, with 130,000 fewer workers on payrolls over the year. Young people, disabled people and men are bearing the brunt of the rise. Earnings growth also slowed, with basic pay rising by 4.2%, down from 4.4%. In London, the unemployment rate surged to 7.6%, nearly double the 4% rate in the south east. Youth unemployment has reached 18.8% in the capital, compared with 14% country-wide, with the number of 18-24 year olds out of work up by 80,000 on the quarter to 575,000. Liz McKeown at the ONS also notes that private sector wage growth continues to slow and is at its lowest rate in five years, while public sector pay growth also slowed but remains elevated. Commenting on the figures, Suren Thiru, economics director at the Institute of Chartered Accountants, said: “The UK’s jobs market is continuing to come apart at the seams as the stifling squeeze from spiralling labour costs pushes more businesses to pivot from simply freezing recruitment to actively cutting jobs.”

Experts are raising concerns that companies are using artificial intelligence (AI) as a justification for redundancies. In 2026, over 25,000 jobs were lost in the tech sector, reversing pandemic hiring trends. Andy Jassy, CEO of Amazon, noted AI’s potential to reduce workforce numbers. Fabian Stephany from the Oxford Internet Institute stated that firms may be using AI as a “smokescreen” for previous over-hiring. Philippe Aghion, a Nobel Prize-winning economist, echoed this sentiment, suggesting that job cuts attributed to AI are often exaggerated. Joanne Thomas from Usdaw called for regulations to support workers amid these changes.

The latest State of Small Business Britain report from the European Research Council (ERC) reveals a record 36% of working-age adults are starting businesses. However, innovation among small and medium-sized enterprises (SMEs) has dropped to a four-year low, with only 24.1% reporting new products or services. Export activity also fell to 17.2%. Stephen Roper, ERC director, noted: “Ambition is not enough… we are seeing a worrying decline in innovation and exporting.” The report highlights funding threats, particularly with the impending end of the UK Shared Prosperity Fund, which poses risks to local business support.

The UK Government has suspended its single trade window (STW) project, which aimed to streamline post-Brexit trade processes. After spending £110m on the initiative with Deloitte and IBM, no funds have been allocated since January last year. The Treasury confirmed the programme’s early closure amid concerns over costs. Mike Lewis, director of TaxWatch, commented: “For all intents and purposes the single trade window has been cancelled without HMRC or Deloitte and IBM having delivered anything. But neither HMRC nor ministers appear to wish to admit this.” While policy development continues, there is no set timeline for the project’s future.

Ed Miliband’s net zero targets may fail without an additional £75bn investment in renewables, according to Wood Mackenzie. The consultancy warns that the UK lacks sufficient wind and solar energy to meet its 2030 clean power goals. Lindsey Entwistle from Wood Mackenzie observed: “The UK faces a critical paradox,” highlighting the need for accelerated renewable deployment while managing fossil fuel reliance. The report also criticises Miliband’s ban on North Sea exploration, which increases dependence on costly fossil fuel imports. A Department for Energy Security and Net Zero spokesman defended the ban, stating it would not enhance energy security.

The World Travel & Tourism Council (WTTC) warns that introducing a €10 (£9) tourist tax could cost the UK economy £14bn by 2027. The research indicates that international visitor numbers would plummet, leading to significant job losses, particularly in small businesses and the hospitality sector. Gloria Guevara, WTTC’s president and CEO, said: “Proposed visitor taxes would lead to a slump in international visitor numbers to the UK.” Additionally, 39% of UK residents would reconsider holidaying domestically if the tax were implemented, highlighting the potential economic impact.

Insurers in the UK paid out a record £6.1bn in property claims in 2025, according to the Association of British Insurers (ABI). This figure marks the highest annual total since 2017. Weather-related claims alone reached £1.2bn, a 14% increase from 2024. Storm damage accounted for £244m, up 32% from the previous year, with average payouts rising to £2,450. Chris Bose, director of general insurance policy at the ABI, said: “Once again, we’re seeing the toll that increasingly severe weather is taking on homes and businesses across the UK.”

The Financial Conduct Authority plans to cut up to £1bn from the £11bn compensation bill owed by carmakers over their involvement in a motor finance mis-selling scandal.

About 40% of Britons are turning to AI tools like ChatGPT, Gemini, and Co-Pilot for financial advice as human advisers increasingly focus on wealthier clients, but experts warn such unregulated guidance lacks safeguards and could be risky. “ChatGPT could be ranking some blog on BuzzFeed with the same kind of importance as the latest Financial Reporting Council report from the Bank of England,” warns Sophie Legrand-Green, head of policy at the Investing and Saving Alliance.