Chancellor John Healey can deliver “immediate remedial action” for the economy in the upcoming Budget without raising taxes, according to Simon French, a Panmure Liberum economist who previously worked at the Treasury. He argues that the £22.7bn fiscal headroom has not deteriorated dramatically, with stronger growth and higher equity prices potentially offsetting pressures from energy prices and gilt yields. He highlights that growth has been better than expected, potentially reducing the fiscal buffer by £5bn. Mr French suggests that major tax changes could still be needed to fund wider policy ambitions that could cost an extra £39bn a year. He says extending National Insurance to savings and investments, replacing inheritance tax, introducing a flat rate of pension tax relief and reforming property taxes are among options for raising substantial revenue.

Andy Haldane, a former Bank of England chief economist, is calling for a three-year moratorium on further tax increases on households and businesses to restore private-sector confidence. He argues that any future fiscal shortfalls should be addressed through public spending cuts rather than higher taxes or additional borrowing. Mr Haldane also proposes a “growth delivery test” for all fiscal measures, assessing their impact on private-sector spending, investment, risk-taking and employment. He argues recent Budgets were unnecessarily complex and, in some cases, damaging to business confidence. This comes amid speculation of potential tax rises in the upcoming Budget, as private sector wage growth lags behind public sector increases.

UK Finance has warned against a proposed windfall tax on banks, arguing that it could harm the sector’s growth and competitiveness. The lobby group has cautioned that increasing taxes would undermine the tax base the Government aims to protect. Jamie Dimon, CEO of JPMorgan, echoed these concerns, highlighting potential job losses if taxes rise, while Barclays’ CEO C S Venkatakrishnan also warned that higher taxes would reduce lending capacity, crucial for business investment.

Reform UK is proposing a taxpayer-funded wage rebate for businesses employing apprentices, plus a £2,000 retention bonus for those who stay with their employer for at least two years after qualifying. The party’s education spokeswoman, Suella Braverman, said a Reform Government would introduce an “apprenticeship wage credit” offering SMEs a 30% rebate on the wages paid to apprentices aged 16 to 18. The party says the measures, which could cost up to £2bn over five years, would help deliver 600,000 apprenticeship starts a year by 2034.

Consumer confidence in the UK has reached its highest level for two years, according to GfK. The sentiment index rose two points to -14, marking an 11-point increase since April. The report shows that households are more optimistic about the economy and more willing to make major purchases. However, GfK cautioned that it is too early to link the improvement to the change in Prime Minister, with rising inflation at 2.9% and global uncertainty still weighing on households. Savings intentions also fell, suggesting consumers may be more willing to spend their accumulated pandemic-era savings.

The Financial Conduct Authority (FCA) has warned that loan notes and mini-bonds issued by unregulated firms can expose investors to total losses and leave them with little or no access to the Financial Ombudsman Service or compensation from the Financial Services Compensation Scheme. Despite a 2021 ban on marketing speculative illiquid securities to most retail investors, the City watchdog continues to see potentially unlawful promotions, issuing more than 1,200 warnings this year and referring cases to other law enforcement agencies where necessary. The FCA is urging firms and professional intermediaries – including banks, lawyers, accountants and auditors – to report suspicious activity, while reminding consumers to check that firms are authorised before investing.

Andrew Noble, a senior lecturer in employment law at Anglia Ruskin University, says planned reforms to zero-hours contracts, due in early 2027, could cost employers up to £2.9bn. The reforms will require employers to offer guaranteed hours based on workers’ regular hours, provide reasonable notice of shifts and cancellations, and compensate workers when notice is inadequate. The changes are intended to reduce insecurity for the 1.23m people mainly employed on zero-hours contracts. However, businesses face significant uncertainty because key details, including the hours threshold and reference period, have yet to be finalised. For employers, costs could include higher guaranteed wage bills, compensation for cancelled shifts, payroll and administrative changes, legal fees and termination payments. The impact is likely to be greatest in sectors where demand and staffing requirements fluctuate unpredictably.

With the Green Party saying a 38% windfall tax on banks’ profits exceeding £800m could generate £19bn annually and boost SMEs by reducing their National Insurance bills, a Labour spokesperson has insisted that ministers are already supporting small businesses. They highlighted that the Government is cutting business rates for nearly 32,000 small businesses, “devolving power to make sure local firms have the workforce they need to thrive, and cutting transport costs to get more customers into our high street shops.”

UK private sector productivity was up 1.8% year-on-year in Q2, according to Morgan Stanley, with some analysts attributing the rise to increasing adoption of AI.