Office for National Statistics (ONS) data shows that unemployment in the UK remains steady at 4.9%, despite a significant drop in job vacancies, which fell to 712,000 in May, nearly half the level of 2022. Private sector earnings growth dropped to 2.9%, putting the average rise in earnings, including bonuses, at 4.3%. Suren Thiru, chief economist at ICAEW, said the ONS figures “point to a fragile labour market,” noting the impact of “soaring employment taxes and the economic turbulence.” He warned that jobseekers may face increased challenges as demand for staff diminishes and hiring slows due to high staffing costs and regulatory pressures.

London’s major employers are struggling to find the necessary skills as AI transforms the job market, with a report from BusinessLDN highlighting that 46% of the capital’s workforce – approximately 2.4m people – are in roles where tasks could be automated. This exceeds the 38% rate seen across the UK as a whole. An AI steering committee – which includes Lloyds Bank and NatWest – has urged the Mayor of London’s AI and Jobs Taskforce to enhance training and skills services. It has also called for a real-time dashboard tracking the impact of AI on jobs.

Government borrowing fell to £16bn in June, slightly below the £16.3bn that had been predicted by the Office for Budget Responsibility (OBR) and £7.9bn lower than a year earlier. So far in the current financial year, total borrowing has reached £57.6bn, according to the Office for National Statistics (ONS). While this is down £3.7bn from the same period last year, it is £2.7bn above the OBR’s forecast. June’s borrowing was boosted by higher income tax and VAT revenues, while interest payments on inflation-linked debt fell. The data shows that the Government paid £11.8bn in debt interest payments last month, with this almost a third lower than in June 2025.

Concerns have been raised over the Government’s AI growth plans, with experts suggesting that they are “fatally flawed” due to inadequate water forecasts. Trade body Water UK has highlighted that datacentres, which require significant water for cooling, are not considered in official forecasts, noting that the Environment Agency’s national framework for water resources failed to include an estimate of the water demands of such facilities.

Barclays analysts have expressed scepticism about the impact of AI on productivity. They said that evidence linking AI adoption to improved productivity is “unconvincing.” Barclays noted that AI adoption appears gradual, with many businesses still lacking exposure to the technology, with the report concluding: “Evidence of a structural pickup in productivity growth remains surprisingly fragile.”

London’s status as a financial capital is under threat, having dropped to 23rd in the global IPO rankings. In 2025, companies raised only 0.49% of the $51bn recorded 20 years ago. Ministers have been urged to abolish stamp duty on shares, with critics saying that it is a tax that hampers investment. Research from the IFS suggests reforms could raise share prices by 1.1% and potentially increase GDP by 0.7%.

The Telegraph‘s Tim Wallace says that John Healey’s appointment as Chancellor has raised questions over future tax policy. He notes that Mr Healey has previously supported raising the top rate of income tax to 50p, increasing capital gains tax, and expanding welfare spending. Mr Wallace says that the Chancellor may now look to raise taxes on higher earners and investors, although Labour has pledged not to increase income tax, National Insurance, VAT or corporation tax. Possible routes to raising revenue, he adds, could include higher CGT, changes to tax thresholds, or other wealth taxes.

Prime Minister Andy Burnham is expected to announce a business rates overhaul that would increase taxes on large fulfilment warehouses, such as those used by Amazon and Asos, to fund more than £1bn of tax relief for pubs, clubs, live music venues and small high-street businesses. The plans include a 20% cut in business rates for hospitality venues and expanding small business rates relief to 100%. Industry groups, including the UK Warehousing Association and the British Retail Consortium, have criticised the proposal, warning it could discourage investment and lead to higher prices for consumers.

Dubai-based property developer Arada has announced plans for Thameside West, a £2.5bn regeneration project in east London. The development will feature 1,500 homes and a public park, with six buildings planned for the first phase. Arada acquired an 80% stake in the site for £225m and will invest an additional £100m. Ahmed Alkhoshaibi, Arada’s group chief executive, stated: “Large-scale developments such as Thameside West require a huge amount of collaboration.” The project aims to deliver 5,000 homes, with 35% designated as affordable housing.