UK business leaders have expressed concern over government short-term policies that jeopardise the economy’s future. In a letter to the Times, they said that “the difficult trade-offs needed to strengthen the UK economy must be set out clearly.” The group, including the chairs of NatWest, Heathrow, and Legal & General, said; “Future generations will inherit the consequences of our short-termism. They are optimistic and deserve better.” The group, who have have formed a “Prosperity Alliance” in a bid to “fill that gap” left by a lack of long-term planning, said they are “focused on harnessing Britain’s competitive advantages to provide a decade of rising prosperity and close the ‘inaction gap’ between what the country needs and what politics alone can do.”

The Government plans to double tariffs on imported steel, raising costs for the construction industry. Mark Reynolds, chair of Mace, has warned that this move will worsen existing cost pressures, especially amid rising energy prices due to the ongoing conflict in the Middle East. Milda Manomaityte, CEO of the Association for Consultancy and Engineering, stated that the tariffs will lead to a “cost shock” for infrastructure projects. Ministers plan to double the tariffs on imported steel and cut the amount that can be bought from overseas, with officials looking to save Britain’s struggling steelmakers. A Government spokesperson noted that the policy will be reviewed after a year.

Rising oil and gas prices linked to the conflict in the Middle East are expected to push UK inflation higher, reversing recent progress toward the Bank of England’s 2% target. Markets have rapidly shifted to price in multiple interest rate hikes, but economists caution this may be overstated and driven by short-term volatility. Jonathan Raymond, investment manager at Quilter Cheviot, says central banks are “in a tough spot,” suggesting that they “cannot afford to let inflation expectations drift higher” but warning that any further tightening risks “amplifying” a slowdown in labour markets. Analysts at Barclays expect the base rate to stay at 3.75% for the rest of this year, while KPMG economist Yael Selfin forecasts that interest rates will be cut once in 2026, “as policymakers remain concerned about persistent inflationary pressures.”

Keir Starmer has indicated a preference for delivering targeted taxpayer-funded support for households struggling with energy costs, rather than a costly universal support scheme. Addressing the Commons Liaison Committee, the Prime Minister emphasised the need to explore all available options to assist those affected by rising costs that are being driven by the conflict in the Middle East, saying the Government will look at “every lever that’s available.” Downing Street says Chancellor Rachel Reeves is set to detail an action plan “that will help protect working people from unfair price rises,” while the Prime Minister said ministers will look to give the Competition and Markets Authority “further teeth,” empowering the watchdog to prevent price gouging.

Small businesses are concerned about a proposed update to tax rules that would require companies controlled by five or fewer individuals to disclose all transactions with participators. This would include cash withdrawals, loans, debts, dividends, and transfers of assets. The Federation of Small Businesses (FSB) has warned that the rules risk pushing up compliance costs. Tina McKenzie, policy chair at the FSB, said: “Every business ought to pay the correct amount of tax, but the UK’s tax system makes this basic task far, far more confusing.” She added: “HMRC must not pile more reporting requirements and red tape on to small firms and self-employed people.” The new rules aim to reduce tax avoidance, with HMRC estimating that 60% of the tax gap comes from small businesses.

Accountants are urging HMRC to clarify tax residency rules for British expats affected by the situation in the Middle East, with many looking to relocate back to the UK from Dubai and other Gulf states concerned over potential tax bills up to £5m. The lack of guidance on “exceptional circumstances” has left many uncertain about their tax obligations. HMRC has indicated that cases will be assessed individually, considering the impact of the conflict on residency status. Nikita Cooper, tax director at Price Bailey, said: “I understand multiple clients are concerned and troubled about the consequences if they return to the UK due to HMRC’s interpretation of residency rules.”

Malcolm Offord, leader of Reform UK in Scotland, has responded to criticism from the Institute for Fiscal Studies (IFS) regarding the party’s proposed tax cuts. Reform plans to align Scotland’s income tax with the rest of the UK and implement a 1p cut, costing £2bn. The IFS labelled these proposals as “not fiscally credible,” saying that each percentage point of growth would yield only £300m. David Phillips of the IFS said: “The analysis of the potential revenue effects of the headline income tax cuts is unserious at best.” Mr Offord dismissed the IFS as a “siren voice of the status quo.”

The Government has been urged to regain control of Britain’s oil and gas supply amid escalating energy security concerns due to the Middle East conflict. The Offshore Energies UK report advocates for replacing the current windfall tax on energy producers, which could unlock £50bn in investment. The report highlights the increasing reliance on imports as domestic production declines, calling for urgent reform of the Energy Profits Levy.

New legislation designed to protect small businesses will ensure companies pay suppliers within 60 days, with late payments potentially triggering fines. Boards must also detail payment terms in their audit reports. The Department for Business and Trade announced that the Small Business Commissioner will gain powers to investigate and penalise poor payment practices. A maximum payment window of 60 days will be mandated for firms with revenues exceeding £54m, with suppliers entitled to 8% interest on late invoices. Business Secretary Peter Kyle said: “It is simply unacceptable” for businesses to close due to late payments. Tina McKenzie from the Federation of Small Businesses welcomed the changes, saying the new rules will “finally bring a stop to big businesses using their small suppliers as sources of free credit.”