The Federation of Small Businesses (FSB) has warned that the conflict in the Middle East is pushing up inflation and squeezing small businesses, with diesel and petrol prices rising 30% and 20% respectively since the war began. Tina McKenzie, the Policy Chair for the FSB, said: “These hikes are hard for any business to cope with, especially after hefty cost increases across the board for small firms that hit in April across energy, employment and business rates.” FSB analysis shows that 64% of small firms cite taxation as their biggest cost pressure.

The UK economy is projected to contract by 0.1% in April, according to economists, with the Middle East conflict set to have an impact on energy prices. Sanjay Raja from Deutsche Bank says that production and spending will “remain subdued as the energy shock catches up with households and businesses.” He also warned that the services sector is likely to decline after a “resounding start to the year.” Capital Economics analysts expect the economy to decline in the coming months, having logged growth of 0.6% in Q1.

The Government will reimburse visa fees for fast-growing tech firms to attract top foreign talent. Chancellor Rachel Reeves announced the initiative as part of a new “concierge service” aimed at supporting companies in digital, life sciences, and clean energy sectors. She said: “We are backing the UK’s most ambitious firms to start, scale and stay here,” while Business Secretary Peter Kyle emphasised the need for Britain to become the best place to scale companies. The Government aims to foster a trillion-dollar technology business by 2035. Critics argue that the plan could harm young British graduates facing a tough job market.

Hiring in the UK has decreased by 24% since the pandemic, according to LinkedIn. The research also shows that that 12% of UK workers are in roles at risk from AI, with employees with low skill adaptability “disproportionately at risk.”

Leading retailers are urging Sir Keir Starmer to take action on youth unemployment, warning that opportunities for young people are diminishing amid rising concerns over a “lost generation.” A letter coordinated by the British Retail Consortium and backed by senior executives from Marks & Spencer, Tesco, Sainsbury’s, Asda, Morrisons and Primark is expected to call for a joint government-industry taskforce.

Seven in ten UK businesses have adopted AI, according to Intuit’s 2026 AI Impact Report. The report, which analysed data from 5.3m businesses, found that 77% of AI users reported increased productivity, while 43% noted revenue growth and 28% said costs were lower. However, London businesses are significantly more likely to use AI extensively, while firms in regions like the South East and South West are less likely to use it or are still at early stages, raising concerns of a widening regional and generational divide. It was also found that many businesses are hiring more staff due to AI integration.

The Government has intensified its efforts against “foreign abuse” of the corporate register by shutting down two services that registered over 4,300 companies for clients primarily based in China. The Insolvency Service noted that these entities diverted fees to Chinese bank accounts and failed to conduct necessary money-laundering checks.

The Telegraph‘s Alex Marsh looks at how HMRC has vastly expanded its access to taxpayer data over the past 15 years, with the tax office arguing that greater data collection and AI tools help tackle tax evasion and close the tax gap. Critics, however, say the tax authority’s growing surveillance powers have not improved accuracy and have instead led to taxpayers being overcharged through flawed automated tax code adjustments. Mr Marsh notes that taxpayers often bear the burden of correcting errors, while concerns grow over HMRC’s use of AI, direct recovery powers, and expanding data-gathering capabilities.

Mark Allan, chief executive of commercial property investor Landsec, has called for reform of the business rates system, saying that that the current regime is hindering growth and investment. He says the Government’s previous commitment to replace business rates has faltered, leading to calls for a commercial property levy based on actual rents. This approach, Mr Allen says, could simplify taxation and support struggling areas while maintaining revenue for local services.

Anthropic has released Claude Fable 5, a public version of its powerful Claude Mythos AI model that was previously restricted to selected organisations due to concerns over its advanced capabilities. The company said the model includes safeguards and usage limits but acknowledged potential risks. Mythos attracted attention from governments and industry leaders because of its ability to identify security vulnerabilities and potentially exploit computer systems. Anthropic said more than 10,000 critical flaws have already been uncovered through testing.