NatWest chairman Rick Haythornthwaite has warned the UK faces a “moment of national crisis” because political instability, excessive regulation and poor decision-making have undermined investment and economic growth. A 2030 Prosperity Alliance report estimates that the average G7 economy has invested £2trn more than the UK over the past three decades. Mr Haythornthwaite said public financial institutions such as the British Business Bank and National Wealth Fund could help close the gap, but argued that most investment must come from the private sector, which needs greater stability and predictability to commit to long-term spending.

The Bank of England has held interest rates at 3.75% for a sixth consecutive meeting, but warned rates may need to rise if the Iran conflict persists and higher energy prices begin feeding into wages and wider inflation. The Monetary Policy Committee (MPC) voted 6-3, with three members backing a rise to 4%. The Bank said that it expects inflation – which stood at 3.1% in the year to August – to exceed 4% by Q1 2027. Suren Thiru, chief economist at the ICAEW, said the Bank chose “patience over panic” by balancing inflation risks with “little evidence that it is fuelling more persistent, economy-wide price pressures.” On what the next MPC meeting might hold, Thomas Pugh, chief economist at RSM, said the Bank was likely to be “uncomfortable leaving rates on hold when inflation rises above that crucial 4% threshold.” Meanwhile, the Bank also announced a major overhaul of its quantitative tightening programme, pausing sales of longer-dated gilts, selling £20bn of shorter-term debt each year and holding its longest-dated bonds until maturity.

The Office for National Statistics (ONS) reported that UK productivity growth was revised to 1.3% annually from 1997 to 2024, up from the previous estimate of 1.1%. This adjustment used new methodologies, incorporating HMRC payroll data to address falling Labour Force Survey response rates. Output per hour is now estimated to be 41% higher than in 1997, compared with 34% under the previous measurement process. Recent data suggest productivity may be improving, potentially helped by greater business investment in AI.

Chancellor John Healey will urge EU finance ministers not to exclude the UK from the “Made in Europe” programme, officially known as the Industrial Accelerator Act (IAA). Emphasising the need for closer UK-EU partnerships in tech, defence, and manufacturing, Mr Healey said: “To me, closer ties with the EU means British businesses get better access to both the supply chains and the customers they need to grow.” He aims to mitigate Brexit’s economic impact while ensuring UK firms remain integrated in European supply chains.

Manufacturers are pressing the Government to address high industrial energy costs in the upcoming Budget. Make UK argues that these costs hinder hiring and growth. The group also recommends limiting the national living wage increase to 3.7% and postponing its extension to 18-year-olds. Stephen Phipson, chief executive of Make UK, said: “If the Government wants our members to stay afloat, the first step is to take some of the weight off their shoulders.” He emphasised that manufacturers require practical solutions rather than “flashy new schemes and announcements.”

The Conservatives are urging Prime Minister Andy Burnham to rule out tax rises in the upcoming Budget, with Shadow Chancellor Andrew Griffith warning that high taxes are driving young people abroad. He also declined to confirm reports that the Conservatives could pledge to abolish inheritance tax, saying he would support such a cut only if the party could fully identify the funding. Mr Griffith added that the Conservatives would look to reduce regulatory burdens on small businesses, citing estimates that tax compliance costs small firms £25bn a year and involves an average of 44 hours annually in tax administration. Saying that the Tories will replace the IR35 tax rules for self-employed workers, he also called for officials to “pause job-destroying red tape.”

Shadow chancellor Andrew Griffith announced plans to overhaul tax rules for self-employed individuals during his first speech in the role. He aims to replace the IR35 regulations, which he described as detrimental to self-employed workers. Griffith stated: “I want to be a chancellor for small businesses and the self-employed.” He also highlighted the burden of tax compliance, estimating that small businesses face £25 bn in costs annually. A taskforce led by Lord Mackinlay will investigate ways to simplify tax paperwork and reduce the compliance burden on small businesses.

Analysis of HMRC data shows that Reform UK’s proposed tax cuts on cryptocurrency gains could provide over £100m in tax relief to the wealthiest investors. The plan aims to reduce capital gains tax on crypto assets to a flat 10%, down from the current 24%. HMRC figures indicate that around 240 crypto millionaires, who made £717m in gains in 2024/25, would benefit significantly.

The number of pensioners subject to dividend tax has increased by nearly 200,000 over three years, following reductions in the tax-free allowance.