FTSE 100 chief executives saw their pay rise sharply over the past year as companies increased the use of share-based incentives to compete with higher salaries offered by US businesses. Median pay granted to FTSE 100 bosses increased 16% to £6.1m, according to Diligent Market Intelligence. Long-term incentives accounted for more than 54% of executive pay packages, up from 52%. AstraZeneca chief executive Pascal Soriot was the highest-paid UK boss at £17.7m, including £11.6m in shares, while Rolls-Royce chief Tufan Erginbilgic could receive up to £18m under a revised incentive scheme. Despite the increases, UK executive pay continued to lag significantly behind the US, with the median pay for S&P 500 chief executives rising 8% to $18.2m (£13.7m).

Britain has agreed to pay 5.38% to borrow £4.25bn over 10 years, the Debt Management Office has announced, with this the highest rate paid on 10-year debt since 1999. Rising borrowing costs are increasing the expense of servicing the Government’s near-£3trn national debt and putting further pressure on the public finances ahead of the Budget. Higher gilt yields could also constrain the Government’s plans for social care, housebuilding and public services. Citi economist Jamie Searle estimates that higher borrowing costs alone could have reduced the almost £24bn of fiscal headroom by around £8.2bn, before accounting for changes to inflation, growth and migration forecasts.

Bank of England policymaker Alan Taylor said the case for raising interest rates is “not compelling” unless higher energy prices persist and create wider inflationary pressures. He said policymakers should focus on evidence of second-round effects, such as higher wages and business prices, rather than the energy shock alone.

UK business confidence has fallen to its lowest level since April 2025, according to Lloyds Bank, amid higher global energy prices and economic uncertainty. Business groups welcomed Prime Minister Andy Burnham’s growth ambitions but urged the Government to ease pressures on firms in the Budget. The CBI called for “breathing space” from costs constraining investment and hiring, while Close Brothers highlighted higher borrowing costs and Budget uncertainty facing smaller businesses.

Businesses are becoming more cautious about adopting artificial intelligence amid concerns over cybersecurity, regulation and trust. An FTI survey of 1,600 senior executives in the US and Europe found 60% had slowed, paused or withdrawn an AI deployment during the past year. Cybersecurity emerged as the biggest concern, with 54% worried about employees using unapproved AI tools. Regulatory uncertainty was also significant, with 81% reporting material problems caused by unclear rules. Companies are increasingly shifting investment from experimenting with new technology towards cybersecurity, staff training and AI governance as they focus on managing existing deployments responsibly.

The Government is preparing for the possibility of “unprecedented” AI-driven job losses, with AI Minister Kanishka Narayan saying contingency plans could include changes to labour market policy and regulation. He said that while there is currently no evidence AI has caused an overall fall in UK employment, the impact of the technology may be underestimated because companies are reducing recruitment rather than announcing redundancies. The Institute for Public Policy Research has warned that up to 8m jobs could be affected in a worst-case scenario, with administrative roles particularly exposed.

UK tech founders have urged Prime Minister Andy Burnham to restrict non-compete clauses, arguing they limit talent mobility, entrepreneurship and Britain’s ability to compete with Silicon Valley.

According to a YouGov poll, 64% of Labour members believe the Government taxes too little and spends insufficiently on public services. Only 9% think the opposite. The survey indicates a desire for increased taxation to fund public services, including a proposed NHS-style social care system costing £18bn annually. Labour members suggested cuts primarily in pensions (32%), foreign aid (25%), and welfare benefits (23%).

Andy Burnham has announced plans to reform the state pension triple lock from 2030, with the changes intended to generate savings to help fund a proposed national care service in England. The Prime Minister said the triple lock – which sees pensions rise each year by whichever is highest of inflation, average earnings growth or 2.5% – would remain unchanged until 2030, after which the earnings growth element would be removed. Officials have suggested the change could save around £15bn a year by 2040, while Jonathan Cribb, deputy director at the Institute for Fiscal Studies, said savings “are likely to be relatively small in the first few years, but rise substantially over time.” Sharon Graham, general secretary of the Unite union, argues that the Government should have “pulled another lever,” such as creating a wealth tax, rather than making changes to the triple lock.