Industry leaders have criticised the Government’s “buy British” procurement drive as a distraction from the taxes, energy bills, business rates and red tape they say are holding businesses back. While Chancellor John Healey wants Government procurement to prioritise British jobs and suppliers, businesses across a number of industries say more urgent reforms are needed. Calls include cutting VAT; reducing business rates and energy costs; easing agricultural and planning regulations; and addressing high raw-material costs. While manufacturers warn that UK energy costs are far above those of European rivals, hospitality businesses fear proposed tourist taxes could further increase costs.

The UK job market is showing signs of recovery, with permanent appointments stabilising in July after 45 months of decline, according to a study by KPMG and the Recruitment and Employment Confederation (REC). The permanent placements index reached the 50-point threshold after almost four years of contraction. Vacancies also improved, reaching their highest level since September 2024, while part-time hiring grew at its fastest pace since August 2023. Demand for staff fell at its slowest rate in 22 months and permanent staff pay increased at its fastest rate in six months. Callum Licence, head of advisory at KPMG, said: “With a new Government, businesses will be looking for signs that new policies can translate into greater confidence to invest and hire,” while Maxine Bligh from REC said: “Rays of light are beginning to break through.”

Hannah Prevett in the Sunday Times says that some firms are “spending small fortunes trying to make themselves attractive employers” by providing workplace perks but often fail to check whether staff actually value them. Research by the CIPD found that 20% of employers are unclear about what their benefits are meant to achieve, while only 15% assess whether they work. A survey of 2,000 UK workers by HR software company Ciphr found that employees tend to prioritise practical benefits such as sick pay, pay rises keeping pace with inflation, flexible working, pensions and financial support over gimmicks such as beer fridges, sleep pods and office slides. Ms Prevett notes that firms including PwC and the Chartered Management Institute are cutting costly perks and focusing instead on flexibility, time and financial wellbeing.

The UK economy is projected to have grown in the second quarter of the year, despite the ongoing impact of the conflict in the Middle East and supply chain issues. With the Office for National Statistics set to release its latest economic data this week, economists think GDP will have increased 0.4% by between April and June. This would mean the economy has posted growth for a second consecutive quarter, having seen a 0.6% rise in the first three months of 2026. Although the economy is forecast to have grown in Q2, Rob Wood, chief UK economist for Pantheon Macroeconomics, is expecting monthly GDP to dip by 0.1% in June. Thomas Pugh, chief economist for RSM UK, is more optimistic about June, forecasting that that economy will “nudge up” by 0.1%.

UK business activity returned to growth in July, with BDO’s output index rising to 95.29 from 93.41 in June – with a reading above 95 signifying growth. The rebound was driven mainly by hospitality and retail, helped by warm weather, domestic tourism and the World Cup, while a modest bounce from the change in Prime Minister also lifted confidence. The report also shows that business confidence improved slightly, rising to 89.96 from a five-year low of 88.45. Manufacturing confidence weakened, however, amid concerns over rising costs and geopolitical tensions. Looking ahead, Scott Knight, head of growth at BDO, said that without greater certainty around the Government’s economic policies, any improvement in the economy “is likely to be temporary, seasonal and short-lived.”

The TUC is urging Chancellor John Healey to carry out a “root and branch” review of the Office for Budget Responsibility (OBR), arguing that its economic models discourage public investment and hold back growth. It particularly objects to the OBR’s assumption that public investment can “crowd out” private capital. The union wants the Government to make greater use of flexibility in its fiscal rules to increase investment through bodies such as the National Wealth Fund and National Housing Bank, and to give the former a longer-term mandate allowing it to back projects that may take up to 15 years to generate returns.

Ben Marlow in the Telegraph argues that while Britain’s major banks have reported strong profits and are paying substantial dividends to shareholders, introducing a windfall tax would be economically damaging. He says that higher taxes could discourage investment, reduce the banking sector’s contribution to the economy, and make the UK a less attractive place to do business. Pointing to the North Sea oil and gas industry as a warning, Mr Marlow says that previous windfall taxes have already driven companies to cut investment, scale back operations, or leave the UK altogether. Highlighting that banks already make significant tax contributions, he argues that further tax increases would risk accelerating capital flight, weakening economic growth and worsening Britain’s financial position.

UK chief executives are receiving record pay packages, with some earning up to £28m annually, according to a survey by the Mail on Sunday. The average FTSE 100 boss earned over £5m last year, with Pascal Soriot of AstraZeneca leading at £17.7m. Bonuses, often paid in shares, are driving this increase as stock markets thrive. It is noted that Shell’s Wael Sawan, Rolls-Royce’s Tufan Erginbilgic, and Unilever’s Fernando Fernandez could all see their earnings exceed £20m if performance targets are met. While UK-based firms are closing the pay gap with their US peers, data from pay advisory firm ISS Corporate shows that bosses across S&P 500 firms earned an average of £12.2m last year.

The Financial Conduct Authority (FCA) has warned that unregulated lenders, money brokers, leasing firms and other lightly regulated financial businesses present increasing risks of financial crime and money laundering. Although these firms are not subject to most FCA rules, they must still register for anti-money laundering supervision, and the regulator is concerned that some have inadequate financial crime controls. The FCA has reminded regulated firms, including banks, to carry out thorough due diligence when dealing with unregulated businesses. It has also launched a review of around 900 “Annex 1” firms, including unregulated lenders and money brokers, and warned that registration applications will face greater scrutiny. The City watchdog said previous reviews had uncovered basic failures, including poor risk assessments, weak oversight of financial crime risks and firms operating without the required registration.

Richard Moriarty, chief executive of the Financial Reporting Council (FRC), has criticised the excessive length of annual reports, which now average 98,000 words. He argues that this detracts from boards’ focus on innovation and growth. On the need for reform, he says: “Wouldn’t it be good if this were a once-in-a-generation reset?” In an interview with the Mail on Sunday, Mr Moriarty also highlights a regulatory gap allowing large private companies to face lighter oversight than their listed rivals, despite being systemically important. He also questions whether traditional annual reports and virtual shareholder meetings remain fit for purpose and supports modernising corporate reporting.

Andy Burnham will launch a cost-of-living tour this week, focusing on “everyday fixes” for rising bills. The Prime Minister’s key proposals include accelerating measures against “subscription traps,” forcing companies to make cancellation easier and provide clearer information about costs before customers are automatically renewed at higher prices. Mr Burnham will also consult on adding deceptive discounting to the Competition and Markets Authority’s list of banned practices, targeting firms that artificially raise prices before advertising a discount. Dame Clare Moriarty, chief executive of Citizens Advice, welcomed the proposals, saying subscription traps and deceptive discounts are a “widespread problem.”

Hargreaves Lansdown has announced that employees must return to the office for at least three days a week starting next year. This decision aligns with a trend among major financial firms, including JPMorgan and Revolut, to enforce stricter return-to-office policies. TSB has also mandated a similar requirement for its workforce. It is noted that the shift back toward increased office attendance has led to increased demand for office space in cities.