The UK economy is projected to experience sluggish growth this year, according to the British Chambers of Commerce (BCC). The industry body’s growth forecast has been revised down to 1% from 1.2%. The report details that the services sector is expected to support the economy, while construction and manufacturing face contractions. Inflation is also a concern, with the Consumer Price Index expected to reach 2.7% by the end of 2026. Warning of the impact of uncertainty in the Middle East, David Bharier, head of research at the BCC, said higher energy prices linked to the conflict could keep inflation “firmly above” the Bank of England’s 2% target. Vicky Pryce, chair of the BCC’s economic advisory council, warned that a rise in unemployment would be a “worrying drumbeat” throughout 2026, adding that it will have a “widespread economic impact, hitting consumer and household spending and potentially also the housing market.”

Chancellor Rachel Reeves has warned that rising oil prices will likely increase inflation in the UK. In a statement to MPs in which she called for immediate de-escalation of the Middle East conflict, Ms Reeves noted that UK businesses and consumers would feel the impact of disruptions in global oil trade. She said: “The economic impact of the situation in the Middle East will depend on its severity and duration,” adding that it is “likely to put upward pressure on inflation in the coming months.” This followed a meeting with executives from the International Energy Agency and G7 ministers, who agreed to hold off using oil reserves. Ms Reeves said the UK “stands ready” to allow reserves to be used. She also revealed that the Ministry of Defence is using Treasury funds for defensive operations in the region.

Britain is facing a potential stagflation crisis as the Middle East conflict drives inflation towards 5%. Experts have warned that inflation could exceed the Bank of England’s 2% target, with Tom Pugh, an economist at RSM UK, saying 5% “is the upper range of where we think inflation will land if current energy prices are maintained through the next few quarters,” and James Smith at ING putting the figure at 4.7%. Meanwhile a report from WPI Strategy indicates that recession is a possibility due to rising energy prices. Susannah Streeter, chief investment strategist at Wealth Club, said: “The worsening situation in the Middle East has the potential to bring a toxic combination of shocks to economies,” adding that the “spectre of stagflation is hovering,” with high inflation and stagnant growth looking increasingly likely.

Bosses have been warned that there could be a surge in trade unions as reforms set out in the Employment Rights Act take effect. Research shows that 17 new unions have been set up in the past six years and law firm Littler now predicts that even more will be on the way. From April 6th, unions need only 2% of employees for recognition, down from 10%. They will also gain rights to access workplaces for recruitment. Philip Cameron from Littler said: “Pressure on employers is already increasing.” Shadow Business Secretary Andrew Griffith expressed concerns about the impact on the economy, saying: “The last thing our stalling economy needs is a wave of new trade unions.”

Former Chancellor Kwasi Kwarteng has warned that the Government may need to implement tax hikes to cover rising energy subsidies amid uncertainty in the Middle East. In an interview with City AM, he said that soaring oil and gas prices, exacerbated by the war in Iran, could lead to similar market pressures as those seen in 2022 following the Russian invasion of Ukraine. Mr Kwarteng said: “The cry will always be for more subsidies… any subsidy will have to be paid in higher taxation.” He added: “I think the markets will be looking very closely at any energy intervention and they’ll be expecting the Government to pay for it through tax rises and if it doesn’t then they could be at risk.” He also highlighted concerns over Government borrowing costs amid fears of inflation.

Families could lose up to 40% of their estate due to inheritance tax planning errors, warns Laura Rumsey, an inheritance tax specialist at solicitors Rogers and Norton. Many individuals draft wills without considering tax implications, leading to significant financial losses. Ms Rumsey has emphasised the importance of spousal exemptions, saying: “Being married really is beneficial for tax planning.” She also highlighted the potential for families to claim up to £1m tax-free allowances with proper planning. Additionally, deeds of variation can help avoid double taxation on inherited assets, providing a financial advantage if executed within two years of death.

The Parker Review reveals that only 42% of the UK’s 50 largest private companies meet the 2027 diversity target for board representation, dropping from 48% in the previous year. While ethnic minority representation in leadership roles has improved, black representation has declined. The report shows ethnic minorities hold 20% of FTSE 100 board positions and 16% of FTSE 250 roles, both record highs. David Tyler, chair of the review, said: “While progress continues, significant further improvement will be required over the next two years.” Business Secretary Peter Kyle said: “I welcome the progress shown in this report — but progress is not the finish line. There is more to do to ensure our boardrooms truly reflect the talent and diversity of modern Britain.”

The ongoing conflict in the Middle East has shaken financial markets, triggering a £4.5trn loss of global stock value, which fell from £117.6trn to £113.1trn according to the Bloomberg World Exchange Market Capitalisation index. Saxo UK investor strategist Neil Wilson said the market volatility indicates finance executives are “trading on the fumes” of speculation.

A survey by executive search specialist Livingston James and EY has found that 25% of Scotland’s executives feel their teams lack ready successors. The Investigating the Future CEO report surveyed over 200 C-suite leaders. While 75% believe a successor is within their ranks, many expressed concerns about preparedness. Respondents said key traits needed for future CEOs include “vision and determination” (68%) and “resilience” (50%), while emotional intelligence is increasingly valued for leading diverse teams.