The British Chambers of Commerce (BCC) has warned that the UK economy will struggle with growth due to a slump in business investment. The economy is expected to slow sharply in the second half of 2026. While the BCC forecasts 1% growth for 2026, it expects a 0.2% contraction in Q3 and just 0.1% growth in Q4. Unemployment is projected to reach 5%, while inflation could hit 3.6%, exceeding the Bank of England’s forecast. Vicky Pryce, chair of the BCC’s economic advisory council, said that growth in the first two quarters of the year will “soon be well into the rear view mirror as the UK economy continues in the slow lane.”

Long-term Government borrowing costs have reached a 28-year high, with the 30-year gilt yield reaching 5.89%, its highest since 1998, while 10-year gilt yields have hit their highest level since the 2008 financial crisis. The rise reflects concerns over inflation linked to the conflict in Iran, high government debt and increased competition for long-term borrowing, particularly from major technology companies. Higher gilt yields mean the Government will have to pay more to service its debt, reducing the Chancellor’s fiscal headroom and making it harder to fund cost-of-living measures. Panmure Liberum economist Simon French estimates that the rise in 20-year gilt yields could cut the Chancellor’s fiscal headroom by up to £6bn, from around £22.7bn before the Iran war.

The UK manufacturing sector experienced a slowdown in growth in August, with the purchasing managers’ index (PMI) from S&P Global falling from 51.9 in July to 51.7. Despite this decline, the PMI remains above the neutral 50 mark, indicating growth. Business confidence rose to a six-month high, while job creation reached its strongest level in two years, helped by increased orders and efforts to clear backlogs. However, larger manufacturers continued to grow, while smaller firms saw output and new orders decline. The outlook remains uncertain, with higher energy costs and geopolitical tensions expected to increase manufacturers’ costs.

Almost 70% of Britons believe the top 1% of earners already pay a fair share of tax, according to Adam Smith Institute research. Around two-thirds also recognise that higher taxes could drive wealthy people overseas, potentially leaving working people to shoulder more of the burden. The top 1% currently earn 13.3% of UK income but pay 28.2% of all tax, according to the TaxPayers’ Alliance. Critics warn that further rises, including capital gains or wealth taxes, could deter entrepreneurs and investors, reduce tax revenues and weaken economic growth. Economist Lord O’Neill has warned that higher capital gains tax could encourage business owners to delay selling or leave the UK altogether. Shimeon Lee from the TaxPayers’ Alliance comments: “Driving wealthy taxpayers and investors overseas is economic self-harm.”

Family businesses have warned that inheritance tax changes are holding back investment and job creation. A Family Business UK survey found one in four firms had paused or cancelled investment in the past year, while more than half had been negatively affected by changes to tax reliefs. Among medium-sized family businesses, two thirds reported disruption and plans to reduce investment or hiring, while 11% expect to downsize over the next year. Businesses say the reforms are discouraging growth because owners fear leaving large inheritance tax bills for their children. Family Business UK is calling for the Government to restore full business property relief and agricultural property relief ahead of the autumn Budget.

A Freedom of Information request by former Pensions Minister Sir Steve Webb has found that over 1m pensioners now pay income tax at rates of 40% or more. This figure has more than doubled in five years, with 977,000 pensioners affected compared to 455,000 in 2021/22. The additional rate of tax now impacts 115,000 pensioners, up from 39,000. Sir Steve, now a partner at LCP, warned: “Many people of working age may have expected that they would be basic rate taxpayers in retirement, but few will have expected to find themselves paying 40% or more.”

Craig Harrison, a partner at law firm JMW, says business leaders are increasingly worried that the Government’s limited fiscal headroom will lead to new taxes in the Budget, including wealth, mansion and exit taxes, alongside higher capital gains tax. He warns these measures could drive wealth creators away, discourage investment and stifle entrepreneurship, arguing that promoting business growth and transactions would instead boost tax revenues.

The Financial Conduct Authority’s (FCA) new non-financial misconduct rules bring issues such as bullying, harassment, discrimination and other serious inappropriate behaviour within the regulatory framework for around 37,000 non-bank firms. The rules, which say that misconduct can now be viewed as a regulatory issue rather than simply an HR matter, mark a significant expansion of the FCA’s focus on firm culture and individual conduct.

Three motor finance lenders have challenged the Financial Conduct Authority’s (FCA) £9.1bn redress scheme linked to the mis-selling scandal, claiming it misinterprets a Supreme Court ruling. Mercedes-Benz’s financial services arm – which is challenging the scheme alongside Volkswagen Financial Services and Credit Agricole – argues that the City watchdog’s “one-size-fits-all approach… risks sowing the seeds of failure for the scheme as a whole.” The firm has also accused the FCA of “working backwards” to justify the redress scheme.

The London Stock Exchange Group (LSEG) plans to introduce tokenised UK shares in collaboration with Payward, the owner of Kraken. This initiative aims to enhance global access to London-listed stocks. Tokenisation allows assets to be represented on a blockchain, potentially enabling 24/7 trading and instant settlements. Julia Hoggett, LSEG’s CEO, said tokenisation has the potential to change how investors access financial markets. It is noted that the World Federation of Exchanges has raised concerns about the risks associated with tokenised stocks.

A quarter (25%) of workers are travelling more for business than before the pandemic, according to analysis. The research, part of the Booked for Business report by Hotels.com, surveyed 2,000 adults and found that 18% took 12 or more work trips in the past year. London, New York, and Paris are seen as top destinations for blending work and leisure, known as ‘bleisure’ travel. Melanie Fish, a travel expert at Hotels.com, said: “Business travel is no longer just about getting from one meeting to the next.”