Owners of homes valued at £2m or more may defer Labour’s mansion tax until they sell their home or die if they meet low-income criteria, according to a consultation document published by the Government. However, interest will be charged on the deferred tax. The new tax, which was announced in Rachel Reeves’ November 2025 Budget, will impose a surcharge from 2028, ranging from £2,500 to £7,500 annually. To be eligible for deferral, homeowners must prove an income below £35,000 or savings under £16,000. The move could force families to sell inherited properties in order to settle mansion tax bills, on top of inheritance tax liabilities. Additionally, homeowners who fail to pay or defer the tax could have the surcharge taken directly from their paycheques, or have charges registered against their home to ensure payment. An estimated 165,000 homes will pay the levy, raising an estimated £430m a year for the Treasury from 2028-29. Steve Reed, the Housing Secretary, said the surcharge would ensure those who own the most valuable properties in the country “pay their fair share” but his shadow Sir James Cleverly said Labour are “punishing aspiration and success” with “a cruel double death tax.” Labour is also considering adding a premium on top of the surcharge for non-UK resident owners of high-value properties.

Andy Burnham may need to raise taxes to fund his economic plans, economists warned. Following his commitment to match Rachel Reeves’s borrowing controls, speculation arose about potential tax increases. The National Institute of Economic and Social Research (NIESR) indicated that adhering to fiscal rules while expanding state control over utilities would be challenging without tax hikes. Peter Dixon, a senior economist at NIESR, stated: “It would be impossible to adhere to the fiscal rules in an environment where the state increases its role in the economy without tax rises.”

Nearly 60% of finance sector employees are considering leaving their jobs due to mandatory office attendance, according to a report by Morgan McKinley. The survey of 471 workers revealed that 67% feel increased stress or burnout from these requirements. Seb O’Connell, chief executive of Org Group, said: “The return to office debate in the UK financial services sector has moved beyond simple attendance level.” Major firms like JP Morgan and Lloyds Bank have faced backlash over their office policies, with employees pushing back against strict attendance mandates.

Personal insolvencies in England and Wales rose by 7% year-on-year in April, totalling 10,920 cases. The figure included 701 bankruptcies, 4,033 debt relief orders (DROs), and 6,186 individual voluntary arrangements (IVAs). The Insolvency Service noted a 9% decrease in DROs compared to March’s record high. Sebrina McCullough, director at Money Wellness, commented: “Today’s figures should ring alarm bells…the overall trend shows more people are falling into serious financial difficulty than this time last year, and we fear this could be just the beginning.” Additionally, corporate insolvencies increased by 2% from March, driven by geopolitical tensions and rising costs, according to Chris Tate from Azets.

The Treasury is pressuring supermarkets to impose voluntary price caps on essential groceries amid fears of rising food inflation due to the Iran war. Leaked discussions reveal that officials are offering incentives, such as delaying new regulations, in exchange for compliance. The rate of food price rises rose to 3.7% in April and industry groups have warned it could hit almost 10% by the end of the year. Helen Dickinson, chief executive of the British Retail Consortium, defended retailers, pointing out that the UK has the most affordable grocery prices in Western Europe. “The challenge facing retailers is a combination of higher energy and commodity costs resulting from the Middle East conflict, and the soaring cost of the Government’s domestic policies,” she said. “Rather than introduce 1970s-style price controls and trying to force retailers to sell goods at a loss, the Government must focus on how it will reduce the public policy costs which are pushing up food prices in the first place.”

The Office for Budget Responsibility (OBR) has cautioned Labour activists against altering fiscal rules to accommodate long-term government investments. David Miles and Tom Josephs from the OBR said that extending the forecast horizon to ten years could undermine credibility and fail to influence bond investors. Labour backbenchers, including Louise Haigh, have advocated for reform, but Josephs warned that such long-term commitments might be perceived as less credible. The OBR is set to review its fiscal forecasts and sustainability report, pointing to the need for a nuanced approach to public finances. Miles said: “There is more that the OBR can do.”

UK private sector workers are facing significant pressure as inflation surpasses earnings growth, resulting in the worst real income decline since 2022. Average weekly earnings rose by 3.4% in the first three months of the year, matching inflation rates. However, rising global oil prices may push inflation close to 4% soon. Peter Dixon, senior economist at the National Institute of Economic and Social Research, warned: “There is potential for a sharp squeeze in real wage growth in 2026.” The Bank of England is cautious about interest rate hikes due to a weakening jobs market and low wage growth across sectors.

The UK unemployment rate increased to 5% in the three months to March 2026, up from 4.9%, according to the Office for National Statistics. Vacancies fell to a five-year low, indicating challenges for job seekers. Payrolled employees decreased by 20,000, with an estimated drop of 100,000 expected in the following quarter, while youth unemployment reached 16.2%, the highest level since January 2015. Bosses blamed Labour’s decisions to put up the minimum wage and National Insurance contributions for forcing them to turn away from hiring young people. Liz McKeown, director of economic statistics, commented: “Latest figures suggest the labour market remains soft.” Despite wage growth exceeding expectations at 4.1%, concerns about inflation and joblessness persist, with forecasts predicting a peak unemployment rate of around 5.3%.

The Ofgem energy price cap is projected to increase to £1,850 this summer, a 13% rise from the current £1,641. Cornwall Insight attributes this to the ongoing conflict in Iran, which has raised wholesale prices due to the closure of the Strait of Hormuz. Dr Craig Lowrey, principal consultant at Cornwall Insight, warned that the real concern will arise in October when energy demand typically increases. He said: “If the cap stays at a similar level as July, that is when the Government will need to think seriously about targeted support for the most vulnerable.”