Small businesses in the UK often start with limited funds, averaging less than £6,000. A study by Santander revealed that many entrepreneurs rely on family support or personal savings to launch their ventures. Some 80% of respondents reported operating on thin margins, with 37% unable to turn a profit for three years. Deborah Meaden, a judge for the Santander X Awards, noted the risks entrepreneurs take while Mike Regnier, CEO of Santander UK, stressed the need for more funding and support, stating: “Building a successful business is no mean feat in today’s world.”

Consumer confidence in the UK has fallen to its lowest level in four months, according to S&P Global’s UK consumer sentiment index. The index dropped from 47.5 in October to 43.4 in November, indicating growing anxiety about household finances. Maryam Baluch, economist at S&P Global Market Intelligence, noted that the decline is linked to a significant drop in disposable incomes, leading to reduced spending. Clive Black from Shore Capital attributed the decline to Labour’s perceived incompetence, stating: “There is no point speculating as to what will be in the 2025 Budget.”

Former chancellor Lord Ken Clarke has criticised Rachel Reeves for her pre-budget briefings, arguing that they have cast a gloom over the economy and upset the markets. He told Radio 4 that the UK is currently in an acute economic crisis and if it were his Budget, he would probably put up income tax by one or two pence and cut spending.

The Bank of England (BoE) has increased the UK’s deposit guarantee scheme from £85,000 to £120,000, effective December. This decision follows rising inflation, with the consumer price index at 3.8% in September. The BoE estimates that banks will incur less than 0.1% of their annual net income in extra contributions to the Financial Services Compensation Scheme (FSCS), amounting to £44m in one-off costs. Rocio Concha, director of policy and advocacy at Which?, stated: “Increasing the deposit protection limit is a sensible decision to support consumer confidence.” The extra guarantee for sudden influxes of funds will also rise from £1m to £1.4m.

Rachel Reeves is contemplating a last-minute increase to the banking surcharge in the upcoming Budget. This comes after she abandoned plans to raise income tax. A source indicated that while the Chancellor aims to protect the financial sector, many banks have benefited from recent interest rate cuts. Andrew Griffith, shadow business secretary, warned that increasing costs for mortgages and business finance would harm the economy. The banking surcharge, initially set at eight percentage points above the corporation tax rate, was reduced to three points in 2023. A memo suggested that raising it could generate £500m to £1.5bn annually.

More than 7m people will pay the higher income tax rate this year due to frozen thresholds. HM Revenue & Customs forecasts that 39.1m will pay income tax in 2025-26, up from 33m in 2021-2022. The basic 20% tax rate will affect 30.8m,  up 3.4m from five years ago. Meanwhile 7.1m will pay the higher 40% rate, up nearly 2.7m from 2021. The number of 45% additional-rate taxpayers is expected to more than double from 520,000 to 1.2m. Andy King from Evelyn Partners notes: “Measures to mitigate higher income tax bills are thin on the ground.”

The Financial Conduct Authority (FCA) is advocating for enhanced oversight of foreign tech firms that provide essential services to banks. Sarah Pritchard, the FCA’s first deputy chief executive, pointed to the need for strong operational resilience and cyber controls, especially after recent outages affecting over 2,000 companies, including Lloyds Banking Group. Despite the FCA and Bank of England gaining regulatory powers in 2025, no tech firms have been designated as “critical third parties.” Pritchard stated: “We would like to see the system strengthen.”

Confidence in audit quality has risen significantly, with a report from the Centre for Public Interest Audit (CPIA) revealing 100% satisfaction among finance directors, equity investors, and audit committee chairs in 2025. This marks an increase from 2024, where satisfaction levels were 86%, 77%, and 94%, respectively. Baroness Margaret Ford, chair of the CPIA, commented: “The profession has made tangible progress.” However, gaps in understanding auditor responsibilities remain, with Dean Beale, executive director of the CPIA, stressing the need for clearer reporting. The report also highlighted regulatory complexity as a major concern. City AM notes that the Labour Government, in its King’s Speech in July 2024, unveiled a Bill that would reform the Financial Reporting Council (FRC) into a new regulator. However, there has been no movement on that Bill so far.

The EU economy is projected to grow by 1.4% in 2026, surpassing the UK’s expected growth of 1.2%, according to the European Commission’s autumn forecasts. The growth is driven by strong performances in Poland and Spain. The Bank of England has noted that Labour’s tax increases, particularly the rise in employers’ National Insurance, are hindering the UK’s economic prospects. Rachel Reeves’s tax policies may lead to further growth challenges. The EU’s inflation rate is expected to be 2.1%, compared to the UK’s 2.5%, complicating interest rate cuts for the Bank of England.

Local councils in London are asking residents to volunteer for road gritting during the cold snap. They are providing bags of gritting salt, shovels, and hi-vis vests to those willing to help. Councils including Wandsworth and Haringey have initiated schemes to encourage community involvement, citing the challenges of maintaining roads amid rising council tax. Temperatures are expected to drop to 0°C this week, prompting the call for volunteers.