UK medium-sized businesses are facing significant challenges due to rising costs and supply-chain disruptions, according to a survey by BDO. Nearly 50% of firms anticipate these issues will be their primary concern in the coming months. The ongoing conflict in the Middle East is exacerbating these problems, particularly affecting oil and gas prices. Richard Austin, a partner at BDO, commented: “Many firms are taking positive steps, but they are also forced to continue to make difficult decisions around investment and pricing.” The report also predicts that inflation may rise to 4% if oil prices escalate further.

UK start-ups are increasingly disillusioned with the Government’s procurement efforts, according to the Startup Coalition. The group said that Andy Burnham’s “Buy British” initiative must address deep-rooted procurement issues to support the sector effectively. They noted: “This really is the last-chance saloon after successive administrations have delivered warm words but little real action.” Despite a target set by David Cameron in 2015 for one-third of procurement to go to small businesses, only 21% was achieved last year. The majority of government tech spending, for example, went to foreign firms.

Shadow Chancellor Sir Mel Stride has warned that a proposed exit tax could deter investment in the UK. He said such a levy would drive “wealth creators running for the hills” and called on Labour to rule it out. Sir Mel said: “Labour are always looking for more ways to raise taxes on hardworking people. Andy Burnham needs to urgently rule out more tax rises and reassure families, businesses and investors.” He added: “An exit tax would destroy investment in this country and see wealth creators running for the hills – along with the tax revenues they generate. That would only mean higher taxes for everyone else.” A Treasury spokesperson refused to rule out an exit tax ahead of the Budget.

Sir Howard Davies, the former chairman of NatWest, has warned that increased taxes on banks could lead to higher mortgage costs and drive lenders out of the UK. He explained that the banking sector is already the most heavily taxed in Europe, with a total tax rate of 46.6%. Davies cautioned that further taxation would reduce deposit rates and increase borrowing costs for households. He noted: “If we carry on being the most highly taxed banking market in Europe, at what point will that seriously affect the location of activity?” The Treasury currently collects nearly £3bn annually from bank taxes.

The affluent Surrey commuter town Weybridge will be badly affected by Labour’s proposed mansion tax, which introduces an annual surcharge of £2,500 to £7,500 on homes worth over £2m from April 2028. The Runnymede and Weybridge constituency recently recorded more property sales above this threshold than any other area outside of London. The upcoming levy is concerning local residents, particularly long-term homeowners who have lived in their properties for decades on modest incomes. “Many of them have quite modest incomes and obviously they’re concerned about having the funds to pay for a big increase in the council tax,” says Andrew Goddon, a tax partner at TWP accounting. “Some of our clients have been living in the same house for 50 years. There’s a bit of a struggle with some of these concepts.”

Compass has released a report outlining 100 policies for the new Prime Minister’s first 100 days, urging a 2% wealth tax on every £1m. Andy Burnham previously hinted that a wealth tax could be part of his 10-year plan. The Labour Party pressure group says: “Our country’s economy is in ruins… A wealth tax of 2% on every £1m of an individual’s wealth would transform the country.” Economists Gabriel Zucman and Ben Tippet support this tax, aiming to target extreme wealth and raise significant revenue while addressing inequality.

Amanda Blanc has called on Andy Burnham to rule out a tax raid on pensions arguing that ongoing speculation about Budget decisions is prompting people to withdraw cash from their retirement pots unnecessarily. The Aviva boss said: “We don’t want to see, every week, new things in the press about what might happen when in the run-up to the Budget. We should be encouraging people to save into their pension and to keep the money for their retirement.”

Workers on zero-hours contracts may face job losses if Labour’s proposed reforms are enacted, according to a survey by the Chartered Institute of Personnel and Development (CIPD). The survey revealed that two-thirds of employers anticipate increased costs and administrative burdens, leading to potential redundancies. A government-commissioned report found 72% of workers on zero-hours contracts prefer this arrangement for its flexibility. The CIPD also calls on the Government to consider reversing the reduction in the employer national insurance threshold, which the group says has made it harder for businesses to create the entry-level jobs young people need.

Alan Milburn’s review into England’s Neets crisis is set to recommend significant changes to the apprenticeship levy. Introduced in 2017, the levy mandates employers with a £3m payroll invest 0.5% in apprenticeship training. However, it has led to a preference for higher-level apprenticeships, limiting entry-level opportunities for young people. Milburn says his review “will look carefully at how we put young people back at the front of the queue.”

UK inflation is expected to rise to 2.9% in July, up from June’s 2.6%, due to increased energy prices. Ofgem’s recent hike in the energy price cap will add 0.5 percentage points to inflation, according to Ellie Henderson, an economist at Investec. She said the increase will complicate the Bank of England’s efforts to meet its 2% inflation target. While easing motor fuel inflation may provide some relief, rising food prices from crop shortages due to heatwaves could further strain household budgets, adds RSM chief economist Thomas Pugh.

AI-generated legal claims are increasing rapidly, according to Ministry of Justice figures, with employment tribunal cases rising nearly 40% annually. The ease of filing claims using chatbots like Claude and ChatGPT has contributed to the surge, along with the fact it is easier and cheaper to bring claims. Greg Tsuman, former president of the trade body for lettings agents, also notes a significant rise in AI-driven claims against landlords. While increased access to legal recourse is beneficial, the Telegraph’s Matthew Lynn warns that it may lead to higher costs for businesses and consumers. Moreover, without control, AI-driven legal claims “are going to destroy the economy.”