Almost 46% of households in Britain live in areas where economic growth does not improve living standards, according to a new report by PwC. The North-South divide is stark, with regions in the North and Midlands showing lower spending power than the national average. Spending power is 6.6% below the national average in the North East, £1,493 lower in the North West and £1,917 lower in Yorkshire and the Humber, while the South East is 9% above average. Rachel Taylor from PwC said the research “shows just how differently prosperity is experienced across the UK.” The report calls for local authorities to retain more revenue from local growth to enhance community prosperity.

Huw Pill, the Bank of England’s chief economist, has voiced concerns about the current approach to interest rates. He believes rates should be raised to combat inflation risks linked to the conflict in the Middle East. Mr Pill said: “I am uncomfortable with a ‘wait-and-see’ framing of the Monetary Policy Committee’s (MPC) current decisions over bank rate.” He went on to argue that increasing interest rates from 3.75% to 4% would deliver a “clear and unambiguous signal of the MPC’s willingness and ability to address upside risks stemming from events in the Middle East.” “Raising bank rate on this basis need not be the start of a prolonged and aggressive series of increases,” Mr Pill added.

Reform UK has refused to rule out a tax on profitable banks. Treasury spokesman Robert Jenrick said the party has no current plans to increase bank taxes but said investors should “watch this space.” Party leader Nigel Farage has previously backed targeting banks. This comes as speculation grows that Chancellor John Healey could target banks for additional revenue at the Budget, with his £22.7bn fiscal headroom under pressure. Mr Jenrick said that he “100% believes” that Mr Healey will target banks at the Budget because huge profits across the sector are “low hanging fruit.” Meanwhile, Reform UK aims to stimulate the buy-to-let market by proposing tax-free homes on brownfield sites. Richard Tice, the party’s deputy leader, announced plans to eliminate stamp duty, capital gains tax, and rental income tax for a decade on these properties.

Former Prime Minister Gordon Brown has cautioned Andy Burnham against imposing further wealth taxes, while noting that property in Britain is already heavily taxed. Mr Brown suggested that the Government should reconsider reforms of existing taxes like stamp duty and council tax. He also warned that high-net-worth individuals might leave the country to avoid wealth taxes.

Neetu Mistry, managing director of IHG UK and Ireland – the owner of Holiday Inn, has urged Prime Minister Andy Burnham to abandon plans for a tourist tax, warning it could deter visitors and investors. The proposed overnight levy could increase costs for families and potentially lead to the loss of 33,000 jobs in the tourism sector, according to UKHospitality.

Business Secretary Jonathan Reynolds has reassured executives that the Government will not implement an exit tax on companies leaving the UK after spinning out of universities.

Outgoing John Lewis managing director Peter Ruis has warned that a further rise in business rates on large shops would damage the high street, investment and employment. Retailers fear the Government will increase rates for stores with a rateable value of £500,000 or more to help fund lower bills for pubs, clubs and music venues. Mr Ruis said higher rates would put pressure on retailers and argues that business rates reform, rather than further tax increases, would give retailers more room to hire and invest.

Employment in the UK’s services sector fell for the 23rd consecutive month in August, according to S&P’s latest Purchasing Managers Index (PMI) for the industry. This came as businesses continued hiring freezes and headcount cuts amid rising fuel, transport and wage costs, with some turning to automation to improve productivity. The pace of job losses nevertheless eased to its slowest rate since October 2025, while the services PMI rose from 52.1 to 52.5, indicating modest growth and improving business confidence.

Poor workforce health cost the UK economy £87bn last year, according to Simplyhealth analysis. The largest expenses included £51.6bn from sickness absence and £20bn in lost productivity. Employees reported losing an average of 2.1 working days due to difficult access to healthcare. Simplyhealth said: “The impact of workforce health on the economy is significant and requires urgent attention.”

Julian Jessop, an economist at the Institute of Economic Affairs, argues that Brexit’s economic impact has been exaggerated. His report claims that the UK economy has not suffered significantly due to leaving the EU. The Office for Budget Responsibility’s predictions of a 4% productivity drop and a 15% trade reduction have not materialised, the report suggests. Mr Jessop, who says austerity and Brexit “have become convenient scapegoats for problems that have much deeper roots,” is calling for a broader discussion on factors affecting the UK economy.