Britain is facing a potential summer of stagnation as uncertainty looms over the next Prime Minister’s policies. Business leaders express concern that the lack of clarity following Sir Keir Starmer’s resignation could hinder decision-making and consumer spending. Anna Leach, chief economist at the Institute of Directors, said businesses are concerned “about whether taxes are going to change yet again,” while Rain Newton-Smith, the chief executive of the Confederation of British Industry, said: “We cannot increase the tax burden on businesses further without having an impact on the cost of living, which everyone recognises is really challenging for many people at the moment.” Tina McKenzie, at the Federation of Small Businesses, called for “a bold and clear vision to overcome the significant obstacles” faced by small businesses and the self-employed.

Half of London’s businesses say their workforce lacks the skills needed for the age of AI, according to a survey by Survation for BusinessLDN. The survey of 2,043 business leaders revealed that 50% believe their teams possess the necessary capabilities, a decline from 63% last year. The proportion of firms reporting significant skills and capacity gaps reached 15%, up from 4% in 2025. It was found that 81% of firms plan to increase investment in training in the coming year.

With Andy Burnham the frontrunner to become Prime Minister following Keir Starmer’s decision to stand down, he is under pressure to reconsider Labour’s tax pledges. During a recent by-election campaign, Mr Burnham said he would honour manifesto pledges not to raise income tax, National Insurance, or VAT. However, allies have warned that sticking to these commitments could hinder his spending plans. One minister told the Mail: “If we stick to those tax pledges he is going to be hamstrung from the start.” The Mirror notes that Mr Burnham has previously suggested that he wants to revisit the income tax personal allowance, while analysts believe there could be changes to inheritance tax and stamp duty. The Standard, meanwhile, cites economists at Pantheon Macroeconomics who say Mr Burnham could “pitch to Labour MPs’ left-leaning instincts for more spending, funded by higher taxes and moderately looser fiscal rules.”

HMRC has overcharged up to 8.7m pensioners for a decade due to an error in income calculations. This mistake has resulted in an average overpayment of £5, totalling £43.5m last year. The issue arose from HMRC not accounting for the annual rise in the state pension, which is subject to income tax. HMRC said it is “working at pace to fix the issue.”

The Bank of England has revised its stablecoin regulations following industry concerns about competitiveness. The new framework eliminates a proposed limit on customer deposits and introduces a temporary £40bn cap on total sterling-denominated stablecoins. The percentage of deposits issuers must hold in central bank reserves has also been reduced from 40% to 30%. Sarah Breeden, the Bank’s deputy governor, described the changes as a “major milestone” for UK payments. Janine Hirt, CEO of Innovate Finance, has warned that the Bank’s approach “still risks creating the most conservative and cautious stablecoin regime in the world.”

Louis Taylor, chief executive of the British Business Bank, will resign at the end of September. He has led the bank since 2022, guiding it through pandemic-era disruption. David Hourican, the bank’s chief financial officer, will serve as interim chief executive starting October 1 while the search for a permanent successor begins. The British Business Bank, a taxpayer-owned development bank, has invested £23bn in over 64,000 enterprises.

The FTSE 100 rose by 74.58 points, or 0.7%, closing at 10,437.85, following Sir Keir Starmer’s announcement that he will stand down as Prime Minister. The pound strengthened against the dollar and euro, trading at 1.3254 and 1.1587 respectively. Deutsche Bank analyst Shreyas Gopal noted that the next Chancellor’s identity will be crucial for financial markets.

Research shows that social media significantly influences children’s career aspirations, with a US study showing that over 60% of middle and high school students aspire to be social media influencers or have selected their future career based on what they have seen online.