The IMF and Bank of England have both warned that an AI-driven market bubble could suddenly burst risking a “sudden correction” in global financial markets. “On a number of measures, equity market valuations appear stretched, particularly for technology companies focused on artificial intelligence,” the BoE’s financial policy committee (FPC) warned. “This…leaves equity markets particularly exposed should expectations around the impact of AI become less optimistic.” Echoing these concerns, Kristalina Georgieva, IMF managing director, said: “Today’s valuations are heading towards levels we saw during the bullishness about the internet 25 years ago,” drawing parallels with the 2000 crash that followed the dotcom boom.

The UK housing market is experiencing a significant slowdown, described as a “state of semi-paralysis” by estate agents. The Royal Institution of Chartered Surveyors (Rics) reported a 19% decline in inquiries from new buyers in September, marking the third consecutive monthly drop. Speculation about potential tax reforms, including a “mansion tax,” has contributed to buyer hesitancy. Jeremy Leaf, an estate agent, noted: “Rumours of additional property taxes… have resulted in many buyers and sellers sitting on their hands.” Prices are also drifting lower, particularly in the southeast, while first-time buyer homes are rising faster than the national average.

The UK is projected to lose 16,500 millionaires in the coming year, according to a report by Henley & Partners. This comes as Nikolay Storonsky, founder of Revolut, relocates to the UAE, highlighting the trend of ultra-wealthy individuals leaving Britain. Dr Juerg Steffen, CEO of Henley & Partners, commented: “This isn’t just about changes to the tax regime. It reflects a deepening perception among the wealthy that greater opportunity, freedom, and stability lie elsewhere.”

The Tory leader Kemi Badenoch has promised to abolish stamp duty for all primary residences, regardless of price. In her first Conservative Party conference speech, Badenoch described the levy as “un-Conservative” and a “bad tax” that held back economic activity. Ditching the tax for primary residences would cost the Treasury £9bn a year by the time of the next election, according to Tory estimates, but will lower the barrier to property ownership, leading to increased sales and generating more economic activity. The policy would be funded by the £47bn in savings the party has already identified. Following the announcement, the Institute of Economic Affairs said: “Abolishing stamp duty is the single best reform any government could make to Britain’s tax system.”

Businesses are increasingly worried about potential tax increases as the Chancellor’s second Budget approaches on November 26. The Institute of Chartered Accountants in England and Wales (ICAEW) reported that 60% of businesses view the tax burden as a growing challenge, marking a tenfold rise over five years. Alan Vallance, ICAEW’s chief executive, commented: “Confidence has collapsed, uncertainty remains, and the tax burden has hit another record high.” Economists predict that the Chancellor may need to raise taxes by at least £30bn to balance the budget amid rising inflation and public finance concerns.

Sir Keir Starmer has said that although digital ID cards would be mandatory for employment, on a voluntary basis they would streamline access to services like tax records, childcare, and school applications. Critics argue this could lead to mandatory usage, turning everyday tasks into data checkpoints. Initially, the ID will be required for proving the right to work in the UK. Starmer praised India’s digital ID system, calling it a “massive success,” despite concerns over civil liberties. Critics say it is effectively mandatory as citizens cannot access state benefits or file their income tax returns without it.

Shares in motor finance lenders rose sharply following the Financial Conduct Authority’s (FCA) update on its redress scheme. Lloyds Banking Group, owner of Black Horse, saw a 2% increase to 85.06p. Close Brothers, which recently set aside £33m for motor finance issues, jumped 6% to 525.58p. The FCA estimated the total cost of the scheme at £11bn, far below the eye-watering £44bn previously floated. Danni Hewson from AJ Bell noted that most lenders are relieved by the reduced compensation scale, while 14.2m agreements from 2007 to 2024 are eligible for claims. However, FirstRand, owner of MotoNovo, has criticised the scheme, arguing that the plan exceeds reasonable expectations and fails to reflect a recent Supreme Court ruling. Commenting on the compliance side of the programme, Christos Doumas, director at Forvis Mazars, said the “lender-led scheme” is more than a redress exercise. “It is a test of data discipline, accountability and governance across the motor finance sector.”

The Office for National Statistics has revised down UK government borrowing for the current fiscal year by £2bn after HMRC alerted the agency to inaccuracies in VAT receipts. The ONS also reduced its estimate for borrowing in the previous financial year by a further £1bn. The admission deals another blow to the credibility of the ONS but will provide relief for the Chancellor ahead of her autumn Budget. The revision means that the Government has borrowed £81.8bn this financial year, lower than the £83.8bn initially reported, but still nearly £10bn higher than the Office for Budget Responsibility’s projection of £72.4bn in March.

A report from the Department for Work and Pensions (DWP) reveals that the Chancellor’s plan to utilise surplus funds from final salary pension schemes will yield only £11bn for investment, far below the anticipated £160bn. A pensions bill currently progressing through Parliament will enable pension fund trustees to release trapped surplus funds, but independent expert John Ralfe points out that the bill contains “no details of how pensions will be protected if cash is withdrawn. Member security must be a priority with strict rules on repaying amounts if funding deteriorates.”

Reuters looks at the surge in interest in the tokenisation of stocks, noting the difference between those backed 1:1 with actual shares and those that resemble derivatives. While the crypto industry says tokenised shares will boost liquidity, reduce transaction costs and allow for 24/7 trading, traditional financial firms and regulatory experts warn the products often provide no ownership, voting rights or traditional dividends, while creating counterparty risk exposure to the token issuer. Another concern of the major Wall Street players is that tokenisation will drain liquidity away from public markets. However, crypto companies such as Coinbase, Kraken and Ondo Finance say their products give investors the full legal rights and benefits associated with conventional stocks, including 1:1 collateralisation and investor disclosures.

The London branch of Lehman Brothers has officially closed, 17 years after its parent company’s collapse in 2008. A judge ruled that Lehman Brothers International Europe has settled all creditor claims, with most receiving full payment plus 8% interest. Judge Robert Hildyard described this as a ‘seminal moment’ in insolvency history. Ryan Perkins, a lawyer for Lehman, noted that administrators have ‘nothing left to do’ and highlighted the unusual situation of having surplus assets. The bank’s failure was one of the largest bankruptcies ever, leading to a global recession and the loss of 26,000 jobs.

Research by Google indicates that AI-powered tools could enhance productivity in small and medium enterprises (SMEs) by 20%. This could allow business owners to save one day each week. Debbie Weinstein, Google’s EMEA president, highlighted that these tools can assist with various tasks, from writing marketing content to aiding those with learning differences. Google plans to invest £5bn in the UK over the next two years to support AI services.