London has maintained its status as the leading global financial centre, according to the City of London Corporation’s latest report. The city scored 57, down from 58 last year, based on five categories: financial activity, talent and skills, regulatory environment, business infrastructure, and innovative ecosystem. Chris Hayward, policy chairman at the City of London Corporation, said: “London’s offering of advanced capital markets, innovative tech and top global talent make it the No 1 choice for international business.” However, the report highlights weaknesses, including slow internet speeds and the need for improved employee training and digital skills.

London’s high-end property sales have dropped to a five-year low, primarily due to Labour’s tax increases, including stamp duty and mansion tax. The abolition of the non-dom regime has further dampened demand. Across the capital, house prices dropped 1.2%, but Kensington and Chelsea and Westminster saw falls of 16.3% and 15.5%, respectively. The UK as a whole enjoyed house price growth of 2.5%, up from 1.9% in October. Aneisha Beveridge, of estate agency Hamptons, said: “London has now recorded four months of annual price falls, led by sharper declines in prime Central London, where higher stamp duty and uncertainty about the future tax landscape ahead of the Budget weighed heavily.”

UK inflation rose to 3.4% in December, up from 3.2% in November, according to the Office for National Statistics. The rise was driven by higher tobacco prices due to excise duty increases, as well as rising airfares and food costs. Analysts had forecast a rise to 3.3%. Yael Selfin, chief economist at KPMG UK, said: “Today’s data likely closes the door on a February interest rate cut by the Bank of England but rate cuts later in the year are still expected.” Elsewhere, Thomas Pugh, chief economist at RSM UK, said the bump in inflation was temporary and he expected it to “step down to 3% in January, before dropping to around 2% in the second quarter.”

Ed Miliband, Labour’s Energy Secretary, has defended the party’s recent tax increases on the wealthy, stating they are necessary to alleviate costs for ordinary families. In her first two Budgets, the Chancellor raised taxes by a total of £66bn, including a 20% VAT on private school fees and a mansion tax on high-value homes. Miliband remarked: “The whole purpose of this Government is to stand up for ordinary families, and this cost of living crisis is not just something that arose when Russia invaded Ukraine and bills went through the roof. It’s a 15-year issue that families have faced, it’s something that so many families feel. So we are proud of taking action, including through taxation, to make a difference.”

The OECD’s Pillar 2, a global minimum tax set at 15%, has been updated, despite earlier doubts about its viability. Writing in City AM, Tim Sarson, head of tax policy at KPMG, notes that the new rules include a “side-by-side” system exempting US corporations. This update aims to define how multinationals will be taxed on global profits. Sarson stated: “Rumours of the death of the global minimum tax were somewhat premature.” While challenges remain, the consensus among countries has held, indicating the OECD’s influence persists amid geopolitical tensions.

Sir Tom Hunter, a prominent Scottish businessman, has voiced concerns over rising taxes in Scotland, stating they unfairly burden essential workers like nurses and teachers. He noted that many have left the country due to these tax increases, which he believes are higher than in the rest of the UK. Hunter urged for a more competent government to utilise Scotland’s devolved powers effectively. He suggested that reforms in tax, energy, and planning could create 100,000 jobs and add £20.2 bn to the economy. He said: “The general population now, the hard-working people, are being overtaxed.”

Zack Polanski, leader of the Green Party, is advocating for higher wealth taxes to address inequality in London. He criticises Labour’s “attacks” as the parties prepare for the May local elections, where all 32 boroughs are contested. Polanski said: “We will tax wealth, reduce inequality and make London an even greater place to live.” The party proposes several tax reforms, including a 1% tax on wealth over £10m, which they estimate could raise £15bn annually.

The Chancellor has indicated that only pubs will receive tax relief from the Government’s recent business rates U-turn, leaving other hospitality businesses without support. Speaking at the World Economic Forum, she said: “The situation the pubs face is different from other parts of the hospitality sector.” The decision has drawn criticism from industry leaders. “The circumstances pubs face are not unique – the challenges economically, tax, cost pressures, all of those are common across the whole hospitality sector. The specific issues on business rates that pubs face are also shared by hotels,” said Kate Nicholls, the chairman of UKHospitality. “A whole hospitality problem needs a whole solution. The package needs to be substantive and it needs to be sector-wide, otherwise it risks being too little, too late. Businesses are going to be closing.”

US President Donald Trump has withdrawn his threat to impose tariffs on a range of European countries after striking a deal on Greenland with NATO chief Mark Rutte. Talks will continue on a framework agreement involving mineral rights and Trump’s Golden Dome defence system. US stocks rallied on Wednesday after Trump dropped the threat of new levies with stocks in the EU and the UK also recovering somewhat.

The UK Government is intensifying its regulatory framework for cryptoassets, the Times reports, aiming to establish the country as a leader in digital finance. The Property (Digital Assets etc) Act 2025 received royal assent at the beginning of December. Since then the Government brought in the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025, which comes into force from 2027. The Financial Conduct Authority (FCA) then kicked of a trio of consultations setting out detailed proposals for regulating cryptoasset activities in the UK. Gavin Punia, a partner at Bird & Bird, predicts that the changes will “turbo-charge” the growth of the crypto sector in the UK, resulting in significant work for lawyers, accountants and compliance consultants.

US President Donald Trump has renewed his criticism of the UK Government’s approach to North Sea oil and gas production. Speaking at the World Economic Forum, he claimed the UK has 500 years of extractable supply. He argued that environmental regulations hinder exploration, as do high taxes, whilst those buying windmills from China were “stupid” – making energy more expensive and ruining landscapes.

Analysts surveyed by the London Bullion Market Association suggest that with lower interest rates in the US, central banks diversifying away from the dollar and ongoing geopolitical tension, gold could reach a high of $6,000 this year. Bullion rose 2.7% on Wednesday to $4,888 per ounce, a new record.