Data from HMRC suggests that businesses may be delaying tax payments, with figures showing that firms owed up to £29bn in unpaid corporation tax, VAT, and National Insurance in February. This comes with businesses having faced additional demands from the Treasury, with an increase in employers’ National Insurance contributions among £40bn of tax hikes set out in October’s Budget. The HMRC data also shows that revenue losses, which include remissions and write-offs, hit £5.6bn in 2024. While unpaid VAT liabilities stood at an average of £12bn a month between January and March, corporation tax debts were around £7bn a month and the total amount of overdue PAYE or NI debt payments has consistently been above £8bn a month.

A report from Small Business Britain and BT shows that 60% of small business owners believe AI is essential for their survival in the next five years, with 62% already utilising it. However, barriers such as high costs and lack of understanding hinder adoption. Over two thirds (68%) want more affordable AI solutions, while 51% want more practical support. The report, The AI Opportunity for Small Businesses, recommends measures to avoid creating an “AI disparity” among the UK’s 5.45m small businesses, including affordable AI solutions, incentives for early adoption, and a national AI resource hub.

Factories in the UK are set to face increased taxes under a new “reset” deal which links UK and EU carbon credit markets. The agreement requires the UK to adopt carbon caps “at least as ambitious” as those of the EU, potentially leading to higher taxes for domestic industries.

Research by S&P Global Market Intelligence suggests that British consumers remain “resolutely downbeat” about the economy. The firm’s UK consumer sentiment index came in at 45.2 in May, up from 44.5 in April on a scale where a figure below 50 points to pessimism. The report says that while May saw a more optimistic reading than the month before, attitudes were in “firmly negative territory amid persistent financial worries.”

The Government has announced new rules which target buy now, pay later lenders, bringing them under the regulatory remit of the Financial Conduct Authority (FCA). The legislation means lenders will have to carry out affordability checks to stop people taking on too much debt. It will also see consumers given faster access to refunds and the right to take complaints to the Financial Ombudsman. Warning that BNPL “has operated as a wild west,” Emma Reynolds, Economic Secretary to the Treasury, said the new rules “will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow and create jobs.” Tom MacInnes, director of policy at Citizens Advice, said the legislation is “a crucial step towards better protections for consumers.” He has urged the FCA to “act swiftly to set out the strong consumer safeguards that are so urgently required.”

Economists expect inflation to have risen above 3% in April, with the increase in employer National Insurance contributions expected to have had an impact. A Bloomberg poll saw experts predict that inflation will come in at 3.3%, with this up from the 2.6% year-on-year price growth recorded in March. Analysts at Goldman Sachs said the increase will be “driven by firms passing through additional costs” from the tax hike, while experts at JPMorgan said April’s inflation data will be important in assessing how much of the tax increase businesses are passing on.

The UK’s financial services sector is facing a skills gap, according to a report from Harvey Nash which highlights the rapid pace of AI adoption in the sector. AI has been identified as the scarcest skill, having placed seventh just 18 months ago, with analysis showing a 260% increase in reported shortages. Rhodri Hughes, executive director for financial services at Harvey Nash, said that while the UK has always been seen as a leading global financial hub, “this could come under threat” if skills shortages are not addressed. The report shows that 89% of technology leaders in the financial services sector are investing in AI, up from 43% a year ago. It was also shown that just 9% of financial services executives believe their firm is prepared for incoming AI regulation, while 14% do not have an AI regulatory risk framework in place.

The UK and EU have agreed a new post-Brexit reset deal which covers trade, fishing, defence, energy and strengthening ties in a number of policy areas. Prime Minister Sir Keir Starmer said the deal puts Britain “back on the world stage,” insisting that it “gives us unprecedented access to the EU market, the best of any country … while sticking to the red lines in our manifesto.” European Commission President Ursula von der Leyen said the agreement marked a “historic moment” that represents “opening a new chapter” in the “unique relationship” between the UK and the bloc. Chancellor Rachel Reeves said the agreement was “the best deal with the EU for any country” and would show that Britain “is the place to put investment and do business.” However, Conservative leader Kemi Badenoch called the deal “very concerning,” adding: “We’re becoming a rule-taker from Brussels once again,” while Reform UK leader Nigel Farage described the deal as a “surrender.”

The City of London Corporation has approved the redevelopment of 1 Moor Lane, led by Brookfield Properties, which will add 300,000 sq ft of grade-A office space, increasing the site’s capacity by 50%. The project is part of the Corporation’s goal to create an additional 1.2m sqm of office space to meet future demand. The net-zero development will retain 70% of the original structure and aims for EPC A and BREEAM Outstanding certification, making it one of the most sustainable projects in the area.

UK retail investors are increasingly looking to gold, with 58% of those polled by Charles Schwab saying they expect the precious metal to increase in value over the next year. This is the highest number of any asset class and means gold is outdoing traditional investments such as the FTSE 100, which just 39% of investors feel will increase in value. Investors have been drawn to precious metals amid market volatility driven by uncertainty around US trade policy and tariffs. An increase in capital gains tax is also playing a part, with gold exempt from the levy. Richard Flynn, managing director at Charles Schwab UK, says investors are “increasingly bullish” towards safe-haven assets such as precious metals. He added that while some opt to invest in gold directly, “others prefer to invest in mining stocks to gain exposure to gold within their portfolios.”