Rachel Reeves has been urged by the Tony Blair Institute to stimulate economic growth by reconsidering tax increases and worker rights. The institute stated that Labour’s current policies hinder agility in a fragile economy. Ahead of the Spring Statement, economists expect minimal changes to borrowing and growth forecasts from the Office for Budget Responsibility (OBR). A recent Ipsos survey revealed that 75% of firms are worried about the economic outlook. The report argued that higher employment taxes, curb on migration and expanded protections are detrimental to growth. The institute stated: “Britain needs a reset in favour of reigniting growth and dynamism.”

Business confidence in the UK has significantly declined, according to the Institute of Directors’ latest survey. The economic confidence index fell from -48 in January to -63 in February, with leaders’ confidence in their businesses dropping from +14 to +1. Over 500 respondents cited the sluggish economy, high employment taxes, and heavy regulation as major concerns. Anna Leach, chief economist at the IoD, commented: “Taxes and regulatory compliance remain prominent concerns.” Shadow business secretary Andrew Griffith warned that declining confidence could lead to job cuts and economic stagnation.

Labour’s proposed changes to employment law could lead to unlimited payouts for unfair dismissal claims, alarming business leaders. During private meetings last month, executives warned that removing the compensation cap would make the UK less competitive than countries like France. One attendee stated: “We will end up with worse labour laws than France.” The changes, set to take effect in 2027, will also reduce the time before workers can claim unfair dismissal from two years to six months. Business groups are calling for a cap similar to France’s to alleviate pressure on the tribunal system.

Rising female unemployment, particularly among young women, is hindering the UK jobs market and costing the economy £11bn, according to the PwC Women in Work Index. The report highlights a surge in young women classified as Neet (not in employment, education or training), with rates rising to 11.8% from 9.5%. Carol Stubbings, UK and EMEA managing partner at PwC, commented: “Reducing the number of young women who are Neet is not only a social imperative – it is an economic one.” The report also noted that young women with poor GCSE results face a higher likelihood of becoming Neets.

Lombard Odier has alerted the Government to the adverse effects of high taxes and regulations on investment in the UK. The bank’s UK chief executive, Mark Goddard, stated that many entrepreneurs are leaving for tax havens due to the Chancellor’s tax policies. Lombard Odier’s letter to Rachel Reeves highlighted a negative investment culture and the challenges of raising capital in the UK. Goddard urged the Treasury to unlock £350bn from cash ISAs for start-ups and improve financial literacy in schools. He noted: “We are seeing a quiet but determined exodus.”

HMRC has initiated over 14,000 inheritance tax investigations since 2022, according to a Freedom of Information request by NFU Mutual. The number of cases rose from 3,163 in 2022/2023 to 4,200 in 2024/2025, marking a 33% increase. Sean McCann, a chartered financial planner at the firm, noted that HMRC uses various sources to assess potential underpayment of inheritance tax. He said: “The revenue recovered through these investigations is significant.” The Office for Budget Responsibility predicts that 9.5% of deaths could incur inheritance tax bills by 2029-30, up from 5.1% in 2022-23.

Experts warn that inheritance tax liabilities will increase significantly as more estates exceed the £2m threshold. By 2030/31, over 16,000 estates are projected to breach this limit, compared to 3,620 in 2022-23. The Chancellor announced that unused pension savings will be included in the inheritance tax framework from April 2027. Shaun Moore, a tax expert at Quilter, commented: “Many estates are likely to be hit by the double whammy of pension being brought into scope for inheritance tax.” Planning ahead is crucial to mitigate these impacts.

Families in three London constituencies are facing average inheritance tax (IHT) bills exceeding £1m. Kensington leads with £1.38m, followed by Chelsea and Fulham at £1.11m, and the Cities of London and Westminster at £1.08m, according to HMRC data. These areas contributed £346m in IHT, surpassing the total from all of Scotland. The Treasury collected £7.1bn in death duties from April 2025 to January 2026, with London and the South East accounting for nearly half of this total. A Treasury spokesman noted: “Fewer than 10% of estates are forecast to pay inheritance tax in 2030-31.”

Consumer confidence in the UK fell by three points to -19 in February, according to a GfK survey. The decline raises concerns about the economy, particularly for Labour strategists focused on the cost of living. Neil Bellamy, consumer insights director at GfK, stated: “This decline is mainly driven by weaker perceptions of personal finances.” The survey also noted that fewer consumers feel it is a good time for major purchases, as inflation continues to pressure household budgets. Overall costs rose by 3.6% over the past year, affecting both low and high-income households.

Shadow Chancellor Mel Stride reflects in the Mail on Sunday on Rachel Reeves’ upcoming Spring Statement, which he quips will likely be her last as Chancellor. Despite rising unemployment and economic decline, she aims for a low-key approach, promoting a narrative of stability. But Stride says the reality is she “is too weak to take any meaningful action” and argues that her claims of reducing the cost of living and restoring stability are misleading. Current borrowing is projected to reach £138bn, nearly double the inherited deficit. Stride states: “The truth is we are poorer due to the choices she has made.”

The Chancellor’s spring forecast presents an opportunity to address growth and living standards, writes Louise Hellem, chief economist at the CBI, in the Observer. Despite signs of economic stability, rising unemployment, now at a five-year high, poses a significant challenge. Hellem says that increased national insurance contributions and the national living wage are driving up business costs, which ultimately harm job creation. To improve the labour market, the Government must rethink wage policies and support investment in skills and training, she concludes.

Katharine Braddick is to succeed Sam Woods as chief executive of the Bank of England’s Prudential Regulation Authority (PRA) when his term expires at the end of June. Braddick is head of strategic policy at Barclays and previously held senior roles at the Treasury and the PRA. The appointment was welcomed by BoE governor Andrew Bailey and other city leaders. The Chancellor said that Braddick was “an accomplished pro-business leader [who] understands the City and regulation” while UK Finance CEO David Postings described Braddick as “an outstanding choice for this vital position.”

Rishi Sunak has urged Rachel Reeves to accelerate deregulation to stimulate economic growth. The former PM said cutting red tape was vital, particularly in environmental rules and planning constraints, which he believes hinder housebuilding and infrastructure. Concurrently, eight former energy ministers have called for a reassessment of North Sea oil and gas policies, arguing that current restrictions threaten energy security. They advocate for lifting bans on new exploration and expediting approvals for key developments.

Energy Secretary Ed Miliband has said the rapid growth of data centres poses “inherently uncertain” impacts on the UK’s net zero carbon emissions goals. In response to concerns from MPs, he acknowledged that while the Government’s modelling considers potential emissions from data centres, future demand remains unpredictable. The Environmental Audit Committee, led by Toby Perkins, has launched an inquiry into the energy and water usage of data centres.