The Treasury is giving the Bank of England a secondary legal objective to boost innovation in digital money and payments. The move aims to maintain London’s competitiveness and promote the UK as a hub for stablecoins. Lucy Rigby, the City minister, said: “Whilst financial stability will always remain the bank’s primary objective, this secondary objective will support the bank to continue to drive innovation in payments and digital finance.”

Business confidence rose to 63% in the second quarter, up from 57% in the previous three months, as firms reacted positively to Andy Burnham becoming prime minister. Barclays said 56% of 1,000 business leaders surveyed planned to increase capital spending over the next year, with training and research and development the main priorities. Some 60% said further devolution would improve economic opportunities, while just over a third said Burnham’s proposed No 10 North would benefit their business.

Retail sales in the UK fell significantly in August, driven by record hot weather that deterred shoppers. The CBI’s consumer spending survey revealed a net weighted balance of -48%, down from -26% in July. Retailers anticipate a slight easing in spending decline as cooler weather approaches.

UK car production fell by 10.6% in July, with output down to 61,700 vehicles, according to the Society of Motor Manufacturers and Traders. Exports dropped nearly 16% to 47,377 vehicles, affecting all major markets, including the EU and the US. Despite a 6.8% increase in fully electric and hybrid models, overall production remains below pre-pandemic levels.

Analysts and bond investors are urging the Bank of England to reconsider its strategy of unwinding quantitative easing by actively selling bonds, which is increasing government borrowing costs and dumping £125bn in losses on the taxpayer. Long-term borrowing costs have surged, with the yield on 30-year gilts reaching its highest level since 1998. James Carter, co-head of fixed income at W1M, points out that the “balance sheet can continue shrinking without actively selling bonds into the market” while Neil Wilson, investor strategist at Saxo UK, said the case for continuing active QT was now “rather weak” given the BoE is approaching 2022’s balance sheet level.

Jerry Schurder, the new business rates adviser for Andy Burnham, previously proposed up to £9bn in tax cuts for high street shops. He argued in 2019 that the business rates system is an “increasingly excessive burden.” Schurder suggested reducing the business rates multiplier by a third, which would cost the Treasury £8bn to £9bn annually. He proposed funding this through new taxes, including a levy on agricultural land. Schurder will present his recommendations to the Prime Minister in March 2027, ahead of the next business rates revaluation in 2029.

Lloyds and NatWest are enhancing their community investment initiatives as they move to prove they can help facilitate the Prime Minister’s community and cost-of-living agenda. NatWest has pledged increased support for farmers affected by drought, while Lloyds announced a £100m investment to help young people acquire job skills. Will Howlett, a financial analyst at Quilter, suggests that banks are becoming more vocal about their societal contributions as a way to dissuade the Government from increasing taxes on them.

Reform UK has announced that individuals who wait over half an hour for HMRC to answer their calls will get a £30 credit off their tax bill. The credit will be limited to two claims per tax year. Robert Jenrick, the party’s Treasury spokesman, said the initiative would provide HMRC with an incentive to enhance customer service. Tax officials would also see their pay linked to customer service performance, Mr Jenrick said.