Challenger banks, including Revolut, Monzo, and Shawbrook, have urged Chancellor John Healey to raise the tax threshold for UK lenders. In a letter, they warned that increasing the sector-specific surcharge from 3% would negatively impact mid-tier and specialist banks. Currently, profits up to £100m are exempt, but the banks propose raising this limit to £500m. They argue that a strong mid-tier banking sector is vital for the UK economy. The group, which represents 60% of lending to small and medium-sized enterprises, estimates that the proposed change would cost the Treasury £39m while maintaining tax revenues.

Leading business groups are urging a significant reform of London’s devolution settlement to enhance local control over taxes. They advocate for the capital’s mayor to receive expanded powers regarding tax, spending, and infrastructure to unlock the city’s economic potential. The report from BusinessLDN and others suggests that London should retain more tax revenue, including from business rates.

The number of taxpayers leaving the UK has surged, nearly doubling under Labour. Data obtained from HMRC by UHY Hacker Young shows 69,300 taxpayers told HMRC they were leaving Britain in 2025-26, up by more than 30,000 since Labour won the general election in 2024. Additionally, the number of 16-to-34-year-old expats returning to Britain fell by 15,000 last year. Neela Chauhan at UHY Hacker Young said ever more people had decided they could get a better tax deal abroad.

The UK economy is grappling with unprecedented diesel prices, which have soared to a record high of 199.18p per litre. Brent crude oil also rose above $96 per barrel as geopolitical tensions persist. Kathleen Brooks, research director at XTB, said: “UK fuel costs have now entered unchartered territory.” The UK imports 55% of its diesel, a third of which comes from the US. But President Donald Trump is considering an export ban to curb price rises in the US which could push prices in the UK even higher. Meanwhile, Emma Reynolds, the chief secretary to the Treasury, indicated that the Government could pull some levers to provide families and businesses with some relief from rising prices at the pump.

UK government borrowing costs have reached their highest level since the 2007 financial crisis, with ten-year bond yields rising to 5.40%. The yield on 30-year gilts is around its highest level since 1998. This follows a broader sell-off in sovereign debt amid inflation concerns linked to rising oil prices. Ruth Gregory, deputy chief UK economist at Capital Economics, said she now expects debt interest payments to rise from £122bn this year to £149bn in 2030-31, more than £10bn more than forecast by the OBR when the ten-year yield was at 4.5%.

New data from Morgan McKinley reveals that London will account for over 53% of new banking jobs in the UK, with vacancies expected to rise by 9% in 2026. The capital’s job postings are growing at a rate 18 times higher than the rest of the UK. Barclays has increased its vacancies by 24% year-on-year, while JP Morgan and Citi are also hiring more. Chris Lawton, UK senior managing director at Morgan McKinley, noted a shift towards commercial and technological roles, despite a decline in accountant vacancies.

Chancellor John Healey outlined a plan to reindustrialise Britain during his Labour Party Conference speech in Liverpool, with a focus on investment and apprenticeships. In an attempt to reassure financial markets, Healey acknowledged the need for fiscal discipline as the Government moves to rebuild confidence in British industry. He went on to say Labour would look to reform the welfare system to get people back into work.

Kanishka Narayan, the UK AI Minister, has called for a contingency plan to address potential job market disruptions caused by artificial intelligence (AI). He said that while there is currently no evidence of widespread job losses, “you are going to want to be as ahead of the curve as possible.” The IPPR think tank’s Carsten Jung warned that up to 8m jobs could be negatively affected, explaining that 11% of UK jobs are highly exposed to AI, particularly in secretarial and administrative occupations.

New ONS figures reveal the UK’s post-pandemic workforce crisis was overstated, showing lower economic inactivity among older workers and a stronger employment recovery than previously reported.

Wealth advisers are experiencing a surge in inquiries from affluent clients concerned about potential tax changes ahead of the Autumn Budget. A survey by Rathbones revealed that nearly 50% of clients with over £250,000 in assets are anxious about pension policies, while 58% are worried about tax rules affecting retirement income.