The Confederation of British Industry (CBI) is advocating for a reset of EU-UK relations to enhance competitiveness but says British firms are opposed to “relitigating” the Brexit referendum or re-entering the customs union or single market. CBI chief executive Rain Newton-Smith emphasised the need to reduce trade barriers to foster growth, noting significant challenges including increased customs delays and costs for UK firms. Saying that UK businesses risk being sidelined in European supply chains, Ms Newton-Smith warned: “There is a real risk of UK firms being further left behind.”

Britain’s private sector activity has fallen to its lowest level in 14 months. This was driven by a significant decline in the services industry, which saw its weakest month in three years amid rising costs and declining customer confidence. The S&P Global flash UK composite PMI came in at 49.4 for June, down from 49.7 in May, pointing to economic contraction. This means the economy contracted for a second successive month. Suggesting that the economy “stagnated across Q2,” Thomas Pugh, chief economist at RSM UK, said: “We doubt growth will pick up much through the rest of the year.”

The tax gap in the UK – the difference between the amount owed and the sum actually received – increased to 6.4% for the 2024/25 tax year, according to HMRC, with a £59.2bn shortfall in unpaid taxes. The data shows that small businesses accounted for 62% of the gap. The tax gap for wealthy individuals – the top 2% of UK taxpayers – increased to £3.6bn from £2.5bn last year. Alongside deliberate tax dodging, tax-gap calculations include mistakes, carelessness, disputed interpretations of tax law, unpaid bills, avoidance, evasion and criminal attacks on the system. Emma Rawson, director of public policy at the Association of Tax Technicians, noted that many business owners “are trying to comply with an increasingly complex tax system while managing the day-to-day demands of running a business.”

The Government has unveiled ISA reforms, including measures to discourage savers from using stocks and shares ISAs to bypass new limits on cash ISAs. From April 2027, interest earned on cash held within stocks and shares ISAs will be taxed at 22%. The reforms will also see under-65s limited to £12,000 a year in cash ISA contributions. While transfers from non-cash ISAs into cash ISAs will not be permitted, savers will still be able to transfer money from cash ISAs into investment accounts. Shadow Chancellor Sir Mel Stride has described the changes as a “double whammy for savers – cutting ISA allowances while raising the tax rate on savings interest.”

Cyber chiefs from the Five Eyes alliance, including the UK, US, Australia, New Zealand, and Canada, have issued a ‘call to action’ regarding the imminent threat posed by artificial intelligence in cybercrime. They warn that advanced AI could soon be used by criminals to exploit vulnerabilities in major business networks. The alliance stated: “The evolving landscape of artificial intelligence is rapidly transforming cyber-risk, and we must act swiftly to remain ahead.” They urged businesses to enhance their cybersecurity practices to avoid operational disadvantages.

Alan Taylor, a member of the Bank of England’s Monetary Policy Committee (MPC), has advocated for maintaining interest rates at 3.75% until economic uncertainties are resolved. He emphasised the need for an “extended hold” due to geopolitical risks, particularly the Middle East conflict. Mr Taylor said: “Until we have greater certainty, then, an extended hold at this level is, to me, very much the correct and appropriately measured policy response.” He was among a seven-to-two majority as the MPC voted in favour of keeping interest rates at 3.75% last month. Two members said the base rate should be increased to 4%.

Department for Business and Trade data shows that foreign direct investment (FDI) into Britain fell to a record low of 1,020 projects last year, with this marking a 26% decline from the 1,375 recorded in 2024/25 and the third consecutive annual drop. The number of jobs created has also seen a decline, with only 69,166 vacancies linked to inbound investment projects last year. This is 20% down on 2020/21.

Nearly a quarter of UK adults have used AI tools for mortgage advice, but only 7% say they are very confident in its accuracy, according to research by Barratt David Wilson Homes and TNHG Mortgage Services. The survey found mixed trust in AI, with concerns it may miss key details or produce incorrect information. Mortgage experts warned buyers to be cautious, saying AI cannot replace qualified advisers who assess full financial circumstances, identify suitable deals and ensure borrowers access the most appropriate lending options.