The boss of Shell has warned of fuel shortages across Europe in the near future in the wake of the Middle East crisis. Governments in Asia have already imposed four-day working weeks and now the International Energy Agency is calling on countries to reduce oil and gas consumption. “It is a ripple effect,” Wael Sawan said. “We see south Asia first to get that brunt, that moves to south-east Asia, north-east Asia and then more so into Europe as we get into April.” Senior UK energy industry sources said fuel shortages were an unlikely “worst-case scenario” but were still possible should the conflict drag on into the summer. Meanwhile, the UK Government has said it is drawing up contingency plans to help “those who need it most” if energy bills spiral and announced new powers for the Competition and Markets Authority to fine companies that exploit price rises.

UK manufacturers are experiencing their largest monthly cost increase since 1992, driven by the ongoing Middle East conflict. The S&P Global Purchasing Managers’ Index (PMI) indicates that activity has slowed to its lowest level in six months. Companies are raising prices at the fastest rate since April 2025, while employment has fallen for the 18th consecutive month. Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “Output growth across manufacturing and services has slowed to a crawl as companies blamed lost business directly on the events in the Middle East.”

Britain’s retailers are experiencing their worst month since April 2020, according to the Confederation of British Industry (CBI). Sales have fallen sharply, with expectations of continued decline next month. Martin Sartorius, lead economist at the CBI, commented: “Momentum in the retail sector remained poor in March, with annual sales volumes falling sharply and no signs of an imminent recovery.” The CBI calls on the Government to lower business costs.

Huw Pill, the chief economist at the Bank of England, has warned of increasing inflation risks due to the Iran conflict. He said policymakers must not let the “fog of uncertainty” hinder their actions against rising inflation. In a recent speech, Pill pointed to the need for clarity in monetary policy despite uncertainty. The Bank’s Monetary Policy Committee recently voted to maintain interest rates at 3.75% but indicated readiness to raise them if energy prices remain high. Inflation is projected to reach 3.5% by Q3, exceeding the 2% target.

The ongoing conflict in the Middle East is significantly impacting the UK economy, causing a slowdown in business activity. According to S&P Global’s purchasing managers’ index (PMI), output has dropped to a six-month low, with both domestic and international orders declining. Chris Williamson, chief business economist at S&P Global, said: “The war in the Middle East has hit the UK economy in March, stalling growth while driving inflation sharply higher.”

The Institute of Directors reports that Scottish businesses are increasingly worried about taxation, with concerns reaching a five-year high. The annual state of the nation survey revealed a 132% rise in tax worries since 2021, with 65% of leaders now expressing concern. Additionally, 71% believe income tax rates are excessive, and 74.8% are troubled by tax divergence between Scotland and the rest of the UK. Catherine McWilliam, nations director at the Institute of Directors, said: “Ongoing tax burdens are hindering acceleration, inward investment and skills retention.”

In 2025, HMRC named 583 companies for deliberately defaulting on tax, demanding nearly £533m, more than double the previous year. These firms received £211m in penalties for evading £322m in tax. The Government has published names of tax defaulters since 2015. Mike Lewis, director of TaxWatch, said: “Half a billion pounds is roughly the cost of a GP appointment for every child in the UK.” The largest fine was £56.9m against Hive 360 Employer Limited, which defaulted on £87.5m in tax. HMRC aims to tackle non-compliance through public naming of defaulters.

The Fair Work Agency (FWA) will focus on persuading employers to comply with employment reforms rather than using its enforcement powers, according to chairman Matthew Taylor. He stated that the threshold for deploying these powers is “quite high” and that most breaches of employment law are unintentional. Taylor stressed the need for proportionality in enforcement, saying: “In a perfect world you minimise the amount of enforcement you have to do because you maximise the amount of compliance you achieve by educating employers.” The agency will target sectors with higher exploitation risks, such as construction and social care.

Scottish private equity-backed businesses reported an impressive average annual earnings growth of 34% over the past three years, according to the Private Equity Value Report from Real Deals, in partnership with BDO. The report identified 12 qualifying firms, with ten ranking among the UK’s top 245 private equity-backed companies. Craig Martin, BDO deal advisory partner, stated: “These companies are not only driving growth but have also shown remarkable resilience during challenging times.” The data indicates that 60% of deals in Scotland were minority investments, highlighting a trend towards seeking growth capital while maintaining operational control.

Lord Kulveer Ranger warns in City AM of a growing disparity between the UK and US in digital asset regulation. The US Securities and Exchange Commission recently clarified crypto asset classifications, fostering innovation within defined parameters. In contrast, the UK’s Bank of England proposes restrictive caps on stablecoin holdings, raising concerns about competitiveness. Ranger notes that the UK’s cautious approach may hinder its ability to shape the future of digital finance. He urges the Treasury and regulators to balance stability with innovation, or risk becoming irrelevant.