Thousands of businesses are intentionally limiting their growth to stay below the £90,000 VAT threshold. Lubbock Fine argues that the threshold should be raised to £115,000, reflecting inflation since 2017. Their analysis of HMRC data shows 683,700 firms earned under £90,000 last year, a 1.9% increase. In contrast, businesses earning between £90,000 and £150,000 fell by 8.5%. Jaspal Dhillon, VAT Partner at the accounting firm, said: “Raising the VAT threshold would remove a clear block on growth, rather than holding back smaller firms at the point they are trying to grow.”

The upcoming Spring Statement aims to enhance business confidence and stimulate growth amid a sluggish economy, writes Steve Rigby, chief executive of Rigby Group and chair of Family Business UK. However, he argues that the current tax system, with over 25,000 pages of legislation, hinders growth and creates economic distortions. Rigby suggests that true tax simplification is necessary, advocating for fewer reliefs and better alignment across the system.

Rachel Reeves will today assert that she has fortified Britain’s public finances against shocks from the Iran conflict. In her Spring Forecast, the Chancellor will attempt to provide reassurance after recent fiscal chaos. Despite rising energy prices, Reeves will emphasise the need for tight fiscal policies. She will say: “This Government has the right economic plan for our country in a world that has become yet more uncertain.” The Office for Budget Responsibility is expected to downgrade growth forecasts, with predictions now at 0.9% for 2026. Analysts anticipate no significant change in Reeves’ fiscal headroom of £21.7bn.

The Confederation of British Industry (CBI) predicts a decline in private sector activity over the next three months, with a weighted balance reading of -13%. Falling distribution sales and reduced manufacturing output are key factors. However, business and professional services may experience their best quarter since 2024. Charlotte Dendy, CBI’s economic surveys manager, noted the improvement in sentiment is “notable” but still below long-run averages. She pointed to the need for solutions to lower business energy costs and address the impact of the Employment Rights Act on firms.

Lloyd Blankfein, the former CEO of Goldman Sachs, has warned that the global economy may be heading towards another crisis. In a recent interview, he expressed concerns about hidden leverage in the financial system. He pointed to the rapid growth of the private credit market, which has surged by 56% in the UK since 2015, as a potential risk. In a separate discussion, Blankfein said people had become complacent about a possible shock to the system because of a lack of major “shakeout” since 2008.

The Chancellor is preparing to slow down increases to the youth minimum wage over fears previous rises have fuelled a rise in unemployment among young people. According to sources, Rachel Reeves is poised to backtrack on a manifesto pledge to equalise the minimum wage for all workers over 18, arguing that it can be put off until the 2030s. The unemployment rate among 16 to 24-year-olds now stands at 16.1%, its highest for a decade.

Export orders in the UK manufacturing sector reached their highest level in four and a half years, according to S&P Global’s purchasing managers’ index (PMI). The PMI rose to 51.7 in February, indicating growth in manufacturing output for the fourth consecutive month. However, the sector also experienced a decline in employment, albeit the mildest in 16 months. Martin Beck, economist at WPI Strategy, said the latest data offered a “relatively bullish view” on growth in the UK economy while improvements in domestic demand and government incentives could unlock fresh investment.

European gas prices surged nearly 50% on Monday after QatarEnergy halted liquefied natural gas (LNG) production due to Iranian drone strikes on key facilities. Qatar supplies 12-14% of Europe’s LNG imports, and the disruption raises concerns about global supply. Neil Wilson, an investor strategist at Saxo UK, stated: “European natural gas prices…[have] gone stratospheric as Qatar just halted LNG production.” Analysts at ING warned that if the market anticipates extended losses in Qatari supply, prices could spike to €80-100/MWh. The situation is exacerbated by tensions in the Strait of Hormuz affecting oil prices.

Mastercard and Santander have successfully executed a live payment using an artificial intelligence (AI) agent, marking a significant milestone in automated transactions. The pilot, conducted in Spain, involved purchasing a T-shirt and does not yet represent a commercial rollout. The firms envision that “agentic” AI could simplify everyday purchases by automating transactions with minimal consumer input.