Business

More than 5,500 small business owners from across the UK have written to the chancellor demanding an urgent review of the forthcoming business rates revaluation, warning that it risks forcing thousands of viable firms to close permanently.

The open letter, coordinated by MP Rupert Lowe, has been signed by pub landlords, café owners, shopkeepers and local employers who say they are already operating at breaking point after a decade of relentless cost pressures.

Addressed directly to Rachel Reeves, the letter calls on the Treasury to urgently reassess the impact of the revaluation on small businesses and introduce meaningful mitigation measures to prevent widespread closures on high streets and in town centres.

Business owners describe having endured years of rising rents, soaring energy bills, higher insurance premiums, inflation, staffing pressures, Covid-era debt and successive tax increases. Many say they have adapted where possible, borrowed to stay afloat, cut their own wages and worked longer hours simply to survive.

They now warn that the upcoming revaluation could be “the final straw”.

Unlike online competitors, signatories argue, bricks-and-mortar businesses cannot avoid business rates or relocate to cheaper premises. They trade from physical locations, serve local communities and employ local people — yet feel they are being penalised for doing so.

In the letter, owners warn that even modest increases in rates could trigger job losses, reduced opening hours, higher prices for customers or outright closure. Many stress that once lost, these businesses will not return.

Commenting on the scale of the response, Lowe said the number of signatories continues to grow and reflects deep-rooted fear across the small business community.

“The scale of the response speaks for itself,” he said. “These are viable, hard-working firms that have been ground down year after year and are now being pushed too far. Business rates punish physical presence. They punish community businesses.

“Unless the chancellor acts quickly, we will see permanent closures on high streets across the country. It will be apocalyptic.”

The intervention adds to mounting pressure on the government over business rates reform, particularly from hospitality and retail sectors already warning that rising fixed costs are undermining investment, employment and local economic resilience.

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5,500 small firms urge Reeves to halt ‘apocalyptic’ business rates shock

Hong Kong’s technology sector has enjoyed a standout presence at CES 2026 in Las Vegas, with local firms securing top industry awards and attracting strong interest from global buyers, investors and multinational brands.

Led by Hong Kong Science and Technology Parks Corporation (HKSTP) and the Hong Kong Trade Development Council (HKTDC), and supported by the Hong Kong Electronic Industries Association, the city sent its largest-ever delegation of 61 technology companies to the annual Consumer Electronics Show.

Within the first two days of the four-day event, the Hong Kong Tech Pavilion drew significant footfall from international corporates, venture investors and industry leaders keen to explore frontier technologies and potential commercial partnerships. Organisers said the strong response underlined Hong Kong’s growing influence as a global innovation and technology hub.

The pavilion showcased innovations across advanced materials and sustainable technology, artificial intelligence and data, digital transformation, electronics and robotics, and life and health sciences.

Three Hong Kong firms were recognised at the CES Innovation Awards 2026. Widemount Dynamics Tech secured a Best of Innovation accolade in the Product in Support of Human Security for All category for its Smart Firefighting Robot, designed to operate in hazardous emergency environments.

In the Digital Health category, Eieling was recognised for FattaLab, billed as the world’s first intelligence-driven compact diagnostic device for fatty liver disease, while PointFit was honoured for its patented ultra-thin PF-Sweat Patch, a wearable device that tracks biomarkers through perspiration.

Terry Wong, chief executive of HKSTP, said CES provided a powerful platform to demonstrate Hong Kong’s strengths in research and development, talent and capital.

“Showcasing Hong Kong innovation on a global stage like CES highlights the city’s unique convergence of cutting-edge R&D, global talent and investment,” he said. “As an enabler, HKSTP connects innovators with resources, markets and opportunities, helping them scale internationally.”

Vivian Chan, associate director of business development, exhibitions and digital business at HKTDC, said the organisation’s long-standing involvement with CES reflected its role in facilitating cross-border technology deals.

“Having participated in CES for more than 40 years, HKTDC remains committed to driving technology-led international partnerships through our global network of over 50 offices,” she said. “This reinforces Hong Kong’s position as both a regional and global innovation hub.”

Following CES 2026, the Hong Kong delegation is expected to build on the momentum by engaging with international partners, attracting overseas investment and pursuing new market opportunities. Organisers said the focus now shifts to helping Hong Kong startups and scale-ups convert global exposure into tangible commercial outcomes.

The strong showing in Las Vegas further cements Hong Kong’s role as a connector between Asian innovation ecosystems and global technology markets, as its entrepreneurs look to accelerate international expansion.

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Hong Kong tech firms make strong showing at CES 2026 with award-winning innovations

The cost to UK businesses of Labour’s flagship overhaul of workers’ rights has been cut by billions of pounds after ministers significantly watered down the legislation, according to the government’s own updated analysis.

A revised Whitehall impact assessment published on Wednesday estimates that the Employment Rights Bill will now cost employers around £1bn, a sharp reduction from earlier projections that put the figure as high as £5bn.

The government said the lower estimate reflects a series of late-stage concessions, including phasing in reforms over several years and changes made as policy design and evidence evolved since the original assessment was published in October 2024.

The legislation, which finally passed last month after a prolonged battle in the House of Lords, includes reforms such as tighter rules on zero-hours contracts, enhanced sick pay and changes to parental leave. However, one of Labour’s most contentious manifesto pledges – giving workers day-one rights to claim unfair dismissal – was dropped at the eleventh hour.

Instead, ministers introduced a six-month qualifying period, a move that helped break the parliamentary deadlock but angered some Labour backbenchers and trade unions. Sharon Graham, general secretary of Unite, previously described the final legislation as “a shell of its former self”.

The concession followed negotiations involving six of the UK’s largest business groups and trade unions, but has not fully satisfied employer groups. Kate Shoesmith, director of policy at the British Chambers of Commerce, said the revised £1bn estimate was “likely to be a massive underestimate”.

She warned that the government’s figures failed to capture harder-to-quantify costs, including management time spent understanding the new rules, training staff and implementing revised processes. While the six-month unfair dismissal threshold would reduce costs, she said, it was “unlikely to do so on the scale suggested”.

The government has acknowledged that employers will face higher costs, particularly from changes to statutory sick pay, paternity leave and additional administrative burdens. However, it argued that the impact would be modest when set against the wider economy.

“To contextualise the size of this impact, total employment costs in the UK were £1.4tn in nominal terms in 2024,” the assessment said. “This means the estimated increase represents around 0.1% of the UK’s total pay bill.”

The revised analysis also increases the number of workers expected to benefit from the reforms to around 18 million, up from a previous estimate of 15 million. The largest gains are expected among lower-paid workers in sectors such as social care, hospitality and retail.

Paul Nowak, general secretary of the Trades Union Congress, said the changes would bring the UK closer to international norms. “Crucially, the legislation will give working people the higher living standards and secure incomes needed to build a decent life,” he said.

The assessment concludes that the reforms could raise employment by around 0.1%, improve job quality and productivity, and deliver a small positive boost to economic growth. A government source said the updated figures show the benefits of the reforms outweigh the costs, particularly for younger workers and women.

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Labour workers’ rights concessions slash expected cost to business, government analysis shows

Senior figures from across the UK’s night-time economy have hit back at suggestions that forthcoming business rates relief will apply only to pubs, warning that such a narrow approach risks devastating the wider nightlife and cultural sector.

Industry leaders say recent briefings implying pubs could be singled out for protection ignore the interconnected ecosystem that underpins Britain’s evening economy, including nightclubs, bars, casinos, theatres, live music venues and late-night cultural spaces,  all of which are facing steep cost increases from April 2026.

According to sector estimates, business rates across the night-time economy are set to rise by an average of 76%, with half of venues facing increases of 50% or more. Some operators are bracing for hikes of between 100% and 200%, a level many say is simply unmanageable, particularly for independent businesses operating on tight margins.

Michael Kill, chief executive of the Night Time Industries Association, said framing the issue as a pubs-only problem was both misleading and damaging.

“The suggestion that this is ‘just pubs’ is deeply frustrating,” he said. “Pubs matter, but they are only one part of the nightlife ecosystem. Casinos, clubs, theatres, bars and live music venues all rely on each other to thrive. If one part collapses, the damage spreads quickly.”

Kill warned that rate increases of this scale threaten jobs, cultural output and the infrastructure that underpins the UK’s global reputation for nightlife and entertainment. “If these venues fail, we lose far more than buildings, we lose livelihoods, culture and the social fabric of our towns and cities,” he added.

Sacha Lord, chair of the Night Time Industries Association, said while reports of relief for pubs were welcome, they fell far short of what the sector needs.

“This is a step in the right direction, but it doesn’t go far enough,” Lord said. “Helping one part of hospitality while leaving the rest exposed would be totally unfair. Independent restaurants, clubs and venues are already closing in droves. The chancellor needs to act for the whole sector.”

Operators point to mounting evidence of the strain facing non-pub venues. A city-centre nightclub facing a 120% increase in its rates bill has warned its closure would hit surrounding bars, restaurants and suppliers that depend on its footfall. An independent theatre has seen its rates more than double, putting performances and creative jobs at risk, while a regional casino expects a 100% increase that could undermine long-term employment.

Across the country, independent bars, music venues and late-night operators report increases of up to 200%, raising fears that many will not survive beyond next spring without intervention.

Industry leaders are now calling for urgent government action to extend business rates relief across the entire night-time economy. Without it, they warn of widespread job losses, particularly among young people,  the collapse of independent cultural venues, and lasting damage to Britain’s creative and hospitality industries.

“The idea that this is just about pubs is dangerously simplistic,” Kill said. “Independent venues are most at risk, and April 2026 is a tipping point. Without decisive action, the UK’s social, cultural and economic heartbeat is in real danger.”

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Nightlife leaders warn business rates relief must go beyond pubs

Donald Trump has never been shy about his favourite economic weapon. In his pre-Christmas address to the nation, the US president once again made clear that tariffs remain central to his vision for American prosperity.

While supporters argue that tariffs are reviving domestic industry, lifting wages and restoring economic sovereignty, critics remain unconvinced. What is no longer in dispute, however, is that Trump’s tariff regime has already reshaped the global economy, and will continue to do so well into 2026.

According to the International Monetary Fund (IMF), the cumulative impact of tariff measures is one of the key reasons global growth is now forecast to slow to 3.1 per cent in 2026, down from a pre-Covid average of 3.7 per cent. A year ago, the IMF had expected global growth of 3.3 per cent.

Kristalina Georgieva, the IMF’s managing director, has described the situation as “better than we feared, worse than it needs to be”. While a full-scale trade war has been avoided, growth remains too weak to meet rising expectations around living standards, employment and economic security.

Maurice Obstfeld, a former IMF chief economist and now at the Peterson Institute for International Economics, argues that the damage from tariffs has been contained largely because most countries avoided aggressive retaliation.

China was the notable exception, and even there, the US rapidly softened its stance following forceful counter-measures from Beijing. “We avoided a trade disaster,” Obstfeld says. “But we still ended up with more trade restrictions than when Trump returned to office.”

Five rounds of talks later, tariffs and trade barriers between the world’s two largest economies remain higher than at any point in recent history, creating lasting friction across global supply chains.

Rather than triggering an immediate downturn, tariffs have gradually increased costs and uncertainty for businesses. Planning long-term investment has become harder, while companies face constant risk that exemptions or rules may change overnight.

Ironically, the many loopholes built into US tariffs have softened their economic impact, but at the cost of predictability. “Exemptions lower the effective tariff rate,” Obstfeld notes, “but they also introduce huge uncertainty over who qualifies and for how long.”

This helps explain why the United Nations Conference on Trade and Development (UNCTAD) estimates global trade still grew by 7 per cent last year, reaching more than $35 trillion. Lower interest rates, a weaker dollar, creative supply-chain workarounds and selective tariff carve-outs have all played a role.

The US economy has so far shrugged off much of the disruption. Growth reached 4.3 per cent between July and September, the strongest pace in two years,  underpinned by consumer spending and massive investment in artificial intelligence.

Aditya Bhave, senior economist at Bank of America, believes the US remains “very resilient”, though he warns tariffs have likely added up to half a percentage point to inflation. With consumption accounting for more than a quarter of global GDP, any slowdown in US spending would have global consequences.

Elsewhere, inflation trends are mixed. The eurozone has stabilised near target at 2.1 per cent, while the UK and US remain above central bank comfort levels, keeping pressure on household finances and interest-rate policy.

Several flashpoints loom large over the year ahead. The renegotiation of the USMCA trade deal, EU ratification of a long-delayed South American agreement, and a US Supreme Court ruling on the legality of Trump’s tariffs could all reshape trade flows.

Energy prices will also be pivotal. Goldman Sachs expects Brent crude prices to fall around 8 per cent this year, easing inflationary pressure. A gradual reopening of Red Sea shipping routes could further reduce global transport costs, though risks remain elevated.

China continues to cast a long shadow. Trade between Beijing and Washington fell for a third consecutive year in 2025, and tensions over rare earths, semiconductors and industrial overcapacity remain unresolved.

James Zimmerman, chair of the American Chamber of Commerce in China, says expectations for progress at a planned Trump-Xi summit in April are “low”, but ongoing dialogue is essential. “Beijing wants a fair chance to compete,” he says, “but the over-emphasis on security concerns is creating deep mistrust on both sides.”

Despite bold rhetoric about re-industrialisation, US manufacturing employment has barely moved, slipping slightly below 12.7 million workers. Yet tariffs remain politically entrenched.

Obstfeld argues the US economy has grown despite tariffs, not because of them, thanks to consumer resilience and the AI investment boom. Still, he sees no sign of a policy reversal.

“Tariffs aren’t going away,” he says. “They will remain a central part of economic policy and political debate.”

As 2026 unfolds, the global economy is unlikely to collapse under the weight of tariffs, but it will continue to bend, fragment and adapt around them, with uncertainty now the defining feature of global trade.

Read more:
How tariffs will continue reshaping the global economy in 2026

The government has spent more than £30,000 of public money so far on rebranding England’s nationalised rail services under the new Great British Railways banner, amid mounting scrutiny over value for money.

Great British Railways, the brand under which rail services in England will be brought into public ownership, was formally unveiled last month by Heidi Alexander. The new identity features a modernised version of the familiar double-arrow symbol last used when Britain’s railways were publicly owned under British Rail.

Alongside the logo, a new red, white and blue livery is due to be applied to trains and other passenger-facing materials. Alexander insisted the move “isn’t just a paint job”, arguing that it signals a reset for a rail system that has frustrated passengers for years.

However, a Freedom of Information request obtained by Sky News shows that £32,400 has already been spent on the design process. More than £27,000 of that total, excluding VAT, went on audience research and accessibility testing carried out by a specialist agency.

The spending also covered mock-ups for a future Great British Railways app and a set of poster designs, although the Department for Transport has yet to begin procurement for the app itself.

While around half of the UK’s major rail operators are now under public ownership, the first trains to carry the new Great British Railways livery are not expected to appear until the spring.

The Department for Transport said the full cost of repainting trains and rebranding stations has not yet been determined. Ministers have stressed that the new branding will be rolled out gradually, largely coinciding with routine maintenance schedules, rather than through an immediate and costly overhaul.

The department also declined to provide any estimate for the cost of developing the proposed Great British Railways app, which has been billed as a future “one-stop shop” for rail passengers. Officials indicated that key policy decisions remain outstanding and that no formal procurement process has yet begun.

The spending has drawn criticism from campaign groups, including the TaxPayers’ Alliance, which warned that the branding bill could be “the tip of a costly rail renationalisation iceberg”.

John O’Connell, the group’s chief executive, said the rebrand raised questions about priorities at a time when passengers continue to face disruption and high fares. “Spending tens of thousands on logos and focus groups, without clarity on the final cost of repainting trains or building new digital platforms, suggests a casual approach to taxpayers’ money,” he said.

Ministers have pushed back against those claims, arguing that the branding work has largely been done in-house and that accessibility testing was a legal necessity.

The rebrand comes as Prime Minister Keir Starmer seeks to underline Labour’s commitment to easing the cost-of-living crisis. Frozen rail fares in England have been cited as one of the early ways households will “begin to feel positive change”.

A Department for Transport spokesperson said: “To maximise value for money, the Great British Railways brand was designed in-house and will be rolled out gradually, rather than through an expensive, all-at-once rebrand. As with any new public-facing identity, focus groups – including those with accessibility needs – were essential to ensure compliance with accessibility legislation.”

While the initial costs remain modest in the context of the rail budget, the long-term price tag of rebranding Britain’s nationalised railways is likely to remain under close scrutiny as the Great British Railways programme gathers momentum.

Read more:
Great British Railways rebrand costs pass £30,000 as rollout gathers pace

The government is expected to announce a partial U-turn on looming business rates increases for pubs within days, amid growing alarm over the financial pressure facing the hospitality sector.

According to Sky News, ministers are preparing a targeted rescue package that would shield pubs from steep hikes triggered by business rates revaluations and the withdrawal of Covid-era reliefs. However, the move is understood to apply only to pubs, leaving other hospitality businesses such as hotels, restaurants and leisure venues exposed to potentially severe cost increases.

The development follows warnings that some hospitality venues face business rates bills rising by more than 100 per cent over the coming years, as temporary pandemic support unwinds and rateable values are reassessed.

Sky News’ deputy political editor Sam Coates said there was growing unease inside government about the scale of the impact. He reported that colleagues of Rachel Reeves were “not happy” about the situation, as pressure mounts from MPs and industry figures concerned about closures, job losses and declining high streets.

In November’s Budget, the chancellor announced a significant overhaul of the business rates system, including the introduction of a new band for retail, hospitality and leisure. This marked the formal end of the relief scheme first introduced in 2020 at the height of the pandemic.

While ministers argue that the new framework leaves hospitality businesses better off than before Covid, industry leaders have consistently warned that it fails to reflect the structural disadvantage faced by bricks-and-mortar operators, particularly when compared with online-only competitors.

Pubs, restaurants and hotels remain highly exposed because of their reliance on physical premises, high energy usage and labour-intensive operations. Many have already been hit by rising wages, higher employer national insurance contributions and subdued consumer demand.

The prospect of a pubs-only intervention has raised concerns about fairness within the sector. Hotels and other hospitality operators fear they will be left carrying the burden of rate increases at a time when margins remain thin and recovery fragile.

Coates also reported that parts of the business community have been privately warned by government figures to avoid public protest if they want concessions. One industry source told Sky News that ministers had pointed to farmers as an example of “good, fair negotiators” who secured policy changes without mounting a high-profile campaign.

If confirmed, the pubs-focused rescue package would represent a significant political shift after months of resistance to calls for broader reform. However, it risks deepening divisions within hospitality, with many operators questioning why one part of the sector should be protected while others face potentially crippling cost increases.

Read more:
U-turn on pub business rates hike expected within days, ministers signal

Berkshire Hathaway has formally drawn a line under one of corporate America’s most famous pay traditions, ending the $100,000 annual salary paid to Warren Buffett for more than four decades.

Greg Abel, who took over as chief executive on January 1, will receive an annual pay package of $25 million, a sharp break from the frugal compensation model that long defined the Omaha-based investment giant.

Abel, 63, had already been one of the highest-paid executives at Berkshire before stepping into the top job. In 2024, while serving as vice-chairman overseeing the group’s non-insurance operations, he earned $21 million. His new salary reflects both his expanded responsibilities and a more conventional approach to executive pay at the world’s most closely watched conglomerate.

Buffett, now 95, remains chairman of Berkshire and continues to rank among the world’s wealthiest individuals, with an estimated net worth of around $150 billion, according to the Bloomberg Billionaires Index. He built Berkshire over more than 60 years into a sprawling $1 trillion-plus empire spanning insurance, railroads, energy, manufacturing and retail, including brands such as Geico and BNSF Railway.

Unlike most corporate leaders, Buffett’s wealth has overwhelmingly come from his equity stake rather than his salary. Berkshire has delivered a compounded annual gain in market value of nearly 20 per cent since 1965, according to its most recent shareholder letter, and Buffett still owns more than a third of the company’s Class A shares.

Abel is also heavily invested in the business. He owns roughly $171 million worth of Berkshire stock and, in 2022, sold his 1 per cent stake in Berkshire Hathaway Energy back to the group for $870 million, further cementing his long-term alignment with shareholders.

Buffett has long been vocal about executive pay, repeatedly warning against what he described as “irrational” compensation systems. While he has said he has no objection to paying generously for outstanding performance, he has been critical of pay structures that reward mediocrity or encourage executive envy.

Speaking at Berkshire’s annual meeting in 2017, Buffett said he hoped his successor would already be wealthy and motivated by stewardship rather than the pursuit of ever-higher pay. He has also criticised mandatory disclosures comparing chief executive pay with that of average workers, arguing they often fuel upward pressure on salaries rather than restraint.

The move to a $25 million salary for Abel marks a symbolic shift for Berkshire as it enters a new era — one that balances its unique culture with the realities of succession at one of the world’s most valuable companies.

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Berkshire Hathaway ends $100,000 CEO salary as Warren Buffett’s successor earns $25m

Donald Trump has launched an extraordinary attack on America’s largest defence contractors, threatening to block dividends and share buybacks unless they accelerate weapons production, as he prepares a dramatic expansion of US military spending.

In a post on his Truth Social platform, the US president warned defence firms that he would no longer tolerate what he described as sluggish delivery of military equipment during “troubled and dangerous times”. His comments came ahead of plans to increase the US defence budget for 2027 by 50 per cent, taking annual military spending to $1.5 trillion.

Trump accused defence executives of prioritising shareholder returns and personal remuneration over national security, describing pay packages across the sector as “exorbitant and unjustifiable”. He suggested executive compensation should be capped at $5 million and said companies should redirect capital currently used for dividends and share buybacks into boosting production capacity.

“Military equipment is not being made fast enough,” Trump wrote. “It must be built now with the dividends, stock buybacks and over-compensation of executives, rather than borrowing from financial institutions or getting the money from your government.”

The remarks marked a rare and direct presidential intervention in capital allocation decisions on Wall Street. US defence stocks initially fell sharply in response. Shares in Lockheed Martin, Northrop Grumman, RTX and General Dynamics all declined during afternoon trading. Losses were later pared back after Trump confirmed his intention to significantly raise defence spending.

Trump singled out Raytheon, a subsidiary of RTX, accusing it of being “the least responsive to the needs of the Department of War”. He warned that if the company wanted future government contracts, it would be barred from carrying out further share buybacks.

The president did not clarify how such restrictions would be enforced, raising questions over the legal and regulatory mechanisms available to the White House. Analysts noted that buybacks and dividends are deeply embedded in the financial strategies of established defence firms, many of which rely on consistent shareholder returns to support their valuations.

Lockheed Martin, for example, raised its dividend for the 23rd consecutive year in October to $3.45 per share, while also authorising up to $2 billion in share repurchases, taking its total buyback commitment to more than $9 billion.

Trump’s criticism comes amid long-running concerns over delays and cost overruns in major US defence programmes. Lockheed’s F-35 fighter jet, one of the most expensive weapons systems ever developed, has faced repeated schedule slippages and rising costs. Meanwhile, Northrop Grumman’s Sentinel intercontinental ballistic missile programme, intended to replace the ageing Minuteman III system, is now projected to be 81 per cent over budget, according to the US military.

Neither Lockheed Martin nor Northrop Grumman responded to requests for comment.

For defence investors and contractors alike, Trump’s intervention underlines the growing political risk surrounding the sector, even as government spending is set to rise sharply. While a larger military budget promises long-term revenue growth, tighter scrutiny over executive pay, capital returns and delivery timelines could fundamentally reshape how defence firms operate in the years ahead.

Read more:
Trump threatens defence firms over slow weapons production

UK housebuilding has fallen to its weakest level since the Covid-19 lockdowns of 2020, underlining the scale of the challenge facing ministers as they attempt to revive construction and meet housing targets.

New data from S&P Global shows activity across the UK construction sector continued to shrink in December, with housing and commercial construction work both contracting at the fastest pace in more than four years.

The survey of purchasing managers found that housebuilding and commercial construction declined at their sharpest rate since May 2020, when building sites were forced to shut during the first national lockdown. Civil engineering activity also fell, although at a slower pace than in November.

Overall, the UK construction Purchasing Managers’ Index (PMI) edged up slightly to 40.1 in December, from 39.4 the previous month. However, the reading remains well below the 50 mark that separates growth from contraction, signalling another month of falling activity.

The downturn has now stretched to 12 consecutive months, making it the longest unbroken period of contraction in the construction sector since the global financial crisis of 2007–09.

S&P Global said fragile client confidence continued to weigh heavily on workloads, with many firms reporting that investment decisions had been delayed in the run-up to November’s Budget. Although some of that uncertainty has now lifted, the knock-on effect is still being felt in weak order books.

There were, however, early signs of stabilisation. Business expectations for the year ahead rose to a five-month high in December, suggesting that confidence may be starting to recover as policy clarity improves.

Tim Moore, economics director at S&P Global Market Intelligence, said: “UK construction companies once again reported challenging business conditions and falling workloads in December, but the speed of the downturn moderated from the five-and-a-half-year record seen in November. Many firms cited subdued demand and fragile client confidence. Despite a lifting of Budget-related uncertainty, delayed spending decisions were still contributing to weak sales pipelines at the close of the year.

“By sector, the fastest reductions in activity were seen in housing and commercial construction since May 2020, while civil engineering recorded a slower pace of decline.”

The data adds to concerns that the government’s ambitions to accelerate housebuilding and expand social housing remain at risk, particularly while high interest rates, weak developer confidence and constrained investment continue to hold back new projects.

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UK housebuilding sinks to deepest slump since Covid lockdowns