Analysis by the Institute of Directors (IoD) shows that business confidence has slipped to a record low, with the ongoing conflict in the middle East having a significant impact. The survey saw business confidence drop to a net figure of -76 in March, compared to -63 in February. IoD chief economist Anna Leach said firms have highlighted concerns over “sharp increases in fuel and shipping costs, rising material prices – such as petrochemicals – and delivery delays.” She added: “Across all sectors, the general increase in uncertainty is once again delaying decision-making, as many wait to see how the conflict evolves,” noting that “financial conditions are reported to have tightened, with investors pulling out of deals.” A survey from the British Chambers of Commerce (BCC) found that even before the war in Iran, business sentiment “remained fragile and stuck in a low-growth phase.” David Bharier from the BCC said: “Businesses face a fresh wave of employer costs and burdens” as the new tax year begins, with these “causing further pressure and uncertainty.”

The hospitality sector is facing significant job cuts due to rising costs, with nearly two-thirds of businesses planning to reduce roles. A survey by trade bodies including UKHospitality shows that the minimum wage increase and higher business rates are straining finances. Concerns about taxes are at a decade-high, with 20% of employers worried about business rates. Kate Nicholls, chairman of UKHospitality, said: “It is not acceptable to balance the books on the backs of high street businesses.”

UK businesses invested the equivalent of 11.1% of GDP in the economy in 2023, according to the Institute for Public Policy Research (IPPR). This marks a slight increase from 11% in 2022, but the UK still ranks second lowest in the G7, ahead of only Canada at 10.8%. The IPPR highlights a long-standing issue of underinvestment, which has hindered productivity and growth. Pranesh Narayanan, a senior research fellow at IPPR, commented: “British industry faces a double squeeze: companies are investing too little, and they face some of the highest electricity costs in Europe.” The report suggests adjusting the British industrial competitiveness scheme to encourage investment, urging officials to tweak eligibility criteria “to prioritise sectors where lower electricity costs are most likely to unlock new investment.” The IPPR said the scheme “should focus not just on how much electricity costs weigh on today’s balance sheet, but on where lower energy costs could help drive tomorrow’s investment.”

UK households are bracing for a significant increase in energy bills, with forecasts suggesting an annual cost of almost £2,000. A typical gas and electricity bill is forecast to reach £1,929 a year from July under Ofgem’s quarterly price cap, according to analysis by energy consultancy Cornwall Insight. This is up £290 – or 18% – from the current cap. Craig Lowrey, principal consultant at Cornwall Insight, said a hike in energy bills this summer is “pretty much unavoidable,” adding that if the conflict in the Middle East continues to drive up wholesale prices, “it will be the effects on the October cap that have the most impact.” He added that this is when the question of government support for households “is likely to be revisited.”

Fuel campaigners have warned that soaring diesel prices are pushing up to 1,338 UK sole traders towards bankruptcy. Howard Cox, Founder of FairFuel UK, reported that 36.4% of surveyed tradesmen fear collapse due to current fuel costs. He has called on ministers to extend the fuel duty freeze, which is set to end in September, potentially adding 5p to fuel prices. Mr Cox said: “FairFuelUK and its 1.8m supporters urge the Government to maintain a freeze on fuel duty for the entire duration of this Parliament.”

The UK sectors most vulnerable to artificial intelligence (AI) are also key contributors to tax revenue, according to a Government assessment. AI is primarily applicable to data processing and cognitive tasks, prevalent in finance and professional services. The Office for National Statistics reports that 9% of service firms use AI, compared to lower rates in production and construction. The Department for Science, Innovation and Technology found 97% of employers face AI-related skills gaps. The report notes that AI will both displace and create jobs, with projections suggesting 12% of the workforce could be involved in AI roles by 2035.

Industry leaders have raised concerns over new trade rules that could jeopardise UK steel jobs. The regulations allow foreign pre-made steel parts to enter the UK tax-free, a move critics say undermines efforts to protect domestic manufacturers. Steve Morley, head of the Confederation of British Metalforming, said there was a “very real threat” that jobs would be lost and factories would be shut as a result. He added that the tariffs “will see the price of raw material rise and availability reduce, which will make manufacturing totally uncompetitive, leaving the door open for imports of finished metal goods which will have no restrictions in terms of quotas or tariffs.”

The Government could see an £8bn windfall from rising energy prices, with the Treasury reportedly gaining £20m daily from higher VAT income on fuel, the levy on North Sea profits, and excess profit taxes on power generators.

Data from the Office for National Statistics shows that real disposable incomes fell by 1.2% in 2025, with RHDI per head falling to £6,353 at the end of the year compared to £6,413 at the end of 2024. Real GDP per head decreased by 0.1% in the final quarter of 2025, but it was up 0.6% compared with the same quarter a year earlier.

A new CCTV-equipped car will patrol Leicester to enforce parking regulations. Leicester City Council plans to monitor red routes, zigzag markings outside schools, and bus stop clearways. Offenders may receive a £70 fixed penalty notice or a warning for newly established restrictions. The vehicle, costing £57,000, will be funded by penalty income.