Business

Alcohol-free beer has been added to the UK’s official inflation basket, in a move that underlines changing consumer habits and the growing shift towards healthier lifestyles.

The Office for National Statistics (ONS) confirmed that the product will join more than 760 goods and services used to calculate key inflation measures, including the Consumer Prices Index (CPI), the Retail Prices Index (RPI) and CPIH — its preferred gauge of price growth.

The inclusion reflects a marked rise in demand for low- and no-alcohol alternatives, with the ONS citing increased sales volumes, wider product ranges and greater shelf space dedicated to alcohol-free options across UK retailers. The move is widely seen as recognition of a broader cultural shift, particularly among younger consumers and professionals prioritising wellbeing.

Alongside alcohol-free beer, hummus and pet grooming have also been added to the basket, highlighting how evolving lifestyle choices are reshaping the cost-of-living calculation. The ONS said hummus had gained prominence due to its growing popularity among health-conscious consumers, with UK spending on the product estimated to have reached around £170 million in 2024.

Pet grooming, meanwhile, reflects the continued boom in pet ownership, particularly among smaller, high-maintenance breeds, and the increasing willingness of households to spend on services rather than just goods. Analysts note that services inflation has become a key driver of overall price pressures in recent years, making its accurate representation in the basket increasingly important.

The annual update to the basket is designed to ensure inflation data remains aligned with real-world spending patterns. Items that decline in relevance are removed to make room for emerging trends. This year, bottled premium lager purchased in pubs and restaurants has been dropped, alongside traditional sheets of wrapping paper, which are being replaced by rolls that better reflect modern purchasing behaviour.

Other additions include dashboard cameras and motorhomes, both of which have seen rising demand. Dashcams have grown in popularity as motorists seek to reduce insurance costs and improve security, while motorhomes have benefited from lifestyle shifts following the pandemic and a rise in early retirement trends.

The updated basket will be used in the next set of inflation figures, due to be published on 25 March, and comes at a time of heightened sensitivity around the cost of living. While inflation eased to 3 per cent in January, down from 3.4 per cent in December, economists expect renewed upward pressure in the coming months, driven in part by surging global energy prices linked to the ongoing Middle East conflict.

The Bank of England, which targets inflation at 2 per cent, is widely expected to hold interest rates at 3.75 per cent at its next meeting, as policymakers weigh the risk of rising fuel and transport costs feeding through into broader price increases.

In parallel with the basket update, the ONS is also modernising how inflation is measured. A new system will draw on vast datasets from retailers, analysing around 300 million price points across more than one billion products each month. This marks a significant shift away from traditional in-store price collection, which relied on around 25,000 manually gathered data points.

The move towards real-time, high-volume data is expected to improve the accuracy and responsiveness of inflation reporting, particularly in fast-moving sectors such as groceries, energy and consumer goods.

For households, however, the underlying message remains unchanged. Despite some easing in headline inflation, rising energy costs and global uncertainty mean the pressure on everyday spending is unlikely to disappear any time soon. The inclusion of alcohol-free beer, hummus and pet grooming may signal changing lifestyles, but it also reflects the broader reality that the cost of modern living continues to evolve.

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Alcohol-free beer, hummus and pet grooming join inflation basket as UK spending habits shift

Challenger banks have maintained their dominant position in lending to small and medium-sized enterprises (SMEs), but fresh data suggests their rapid ascent may be levelling off as major high street lenders begin to reassert themselves.

According to new analysis from the British Business Bank, challenger banks accounted for 60 per cent of SME lending in 2025, unchanged from the previous year. The figure marks only the second time in more than a decade that their market share has not increased, raising questions about whether the post-financial crisis disruption of the SME lending market has reached a plateau.

The shift in lending dynamics has been one of the defining structural changes in UK banking since the 2008 financial crisis. Traditional lenders including Lloyds Bank, NatWest, Barclays, HSBC and Santander once dominated SME finance, accounting for 61 per cent of lending as recently as 2012. However, regulatory changes, technological innovation and dissatisfaction among smaller businesses created space for a new generation of lenders to emerge.

Challenger banks such as Starling Bank, Allica Bank and Oxbury Bank have since built significant market share by offering more flexible lending models, faster decision-making and digital-first services tailored to SME needs.

Yet the latest data suggests momentum may be stabilising. Louis Taylor, chief executive of the British Business Bank, said it remains unclear whether challenger banks have reached a natural ceiling or whether incumbent lenders are beginning to reclaim ground.

“There is some willingness for the big banks to staunch that market share diminution,” Taylor said, noting that traditional lenders are increasingly targeting profitable SME segments such as deposits, transaction banking and foreign exchange services.

Recent activity supports that view. Lloyds, for example, announced plans to make £9.5 billion available to SMEs this year, while a consortium of major banks has committed £11 billion to support SME exporters. These moves signal a renewed focus on a segment that high street banks were widely criticised for neglecting in the aftermath of the financial crisis.

Despite this, challengers and non-bank lenders continue to dominate the broader SME funding ecosystem. The report found that non-bank lending and challenger banks together now account for 68 per cent of total SME lending, underlining the diversification of funding sources available to businesses.

Alternative finance providers have become particularly influential. Funding Circle remains the largest non-bank lender, holding a “low-to-mid 50 per cent” share of business loans by volume. The growth of such platforms reflects a structural shift towards more fragmented, specialist lending models that cater to different risk profiles and business needs.

Overall lending activity has shown signs of resilience. Gross new SME lending rose by 9 per cent to £68 billion last year, making it the second-highest annual total in more than a decade. Repayments reached £63 billion, resulting in net lending of £4.6 billion — the first positive net figure since 2020.

However, beneath these headline figures, there are signs of underlying weakness. The total value of outstanding loans and overdrafts has fallen by 22 per cent in real terms since 2012, while the use of traditional overdraft facilities has dropped to a record low of £7 billion. Only 9 per cent of SME lending now comes from conventional bank loans.

Instead, businesses are increasingly relying on short-term and flexible forms of finance. Credit cards and overdrafts remain widely used, suggesting many firms are prioritising cashflow stability over long-term investment. Leasing has also grown in popularity, rising from 6 per cent of SMEs in 2012 to 13 per cent last year, particularly for equipment and machinery.

Loan approval rates have improved modestly, rising to 53 per cent in 2025 from 49 per cent the previous year, but they remain well below pre-pandemic levels of 74 per cent in 2019. This has driven greater reliance on intermediaries, with brokers facilitating £33 billion of SME lending last year, a 25 per cent increase on 2024.

The report also highlights persistent structural gaps in the market. Smaller loans, early-stage businesses and companies built around intellectual property continue to struggle to access finance, reflecting risk aversion among lenders and limitations in traditional credit assessment models.

“There are some holes in the system,” Taylor said, pointing to the referral scheme that requires banks to direct rejected applicants to alternative lenders. Because many applications are declined before reaching formal credit committees, businesses often miss out on this pathway altogether.

The broader picture is one of a maturing but still evolving market. Competition has intensified, keeping pricing competitive for low-risk lending, but borrowing costs remain elevated for higher-risk SMEs due to structural constraints and economic uncertainty.

For policymakers and industry leaders, the key question is whether the current balance represents a new equilibrium or simply a pause in an ongoing shift. While challenger banks have transformed access to finance over the past decade, the re-engagement of high street lenders suggests the competitive landscape is entering a new phase, one defined less by disruption and more by consolidation and coexistence.

In that context, the plateau at 60 per cent may not signal a peak, but rather a stabilisation point in a market that is still adjusting to a fundamentally different model of SME finance.

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Challenger banks hold 60% of SME lending as high street banks fight back

Chinese e-commerce giant JD.com has made a decisive move into the UK market with the launch of its Joybuy platform, setting up a direct challenge to Amazon by promising same-day delivery without the traditional trade-off between speed and price.

The new platform marks JD.com’s most significant expansion into Britain to date, following years of speculation about its ambitions in the market. Joybuy, which had previously been tested through a London pilot, is now rolling out more widely, offering British consumers access to a broad product range spanning electronics, groceries, gaming, household goods and everyday essentials.

The retailer is positioning Joybuy as a full-spectrum marketplace, stocking global brands such as Apple, Samsung and Sony alongside consumer staples including Heinz, Cadbury and Coca-Cola. The proposition is clear: convenience at scale, backed by logistics infrastructure designed to rival, and potentially outpace, incumbents.

At the core of the launch is JD.com’s “Double 11” delivery promise. Orders placed before 11am will be delivered by 11pm the same day, with free delivery available on orders over £29. The company said the service will initially cover more than 17 million consumers across key urban centres including Birmingham, Leicester and Nottingham, signalling a deliberate focus on high-density, high-demand regions.

This logistics-led strategy reflects JD.com’s long-established operating model in China, where it has built one of the most vertically integrated fulfilment networks in global e-commerce. Rather than relying heavily on third-party couriers, the group controls much of its supply chain, from warehousing to last-mile delivery, enabling tighter control over speed, cost and customer experience.

In the UK, that model is being replicated through JoyExpress, the company’s delivery arm, which is supported by a growing European infrastructure footprint. JD.com already operates more than 60 warehouses and depots across Europe, including key UK sites in Milton Keynes and Luton, providing the backbone for its same-day ambitions.

A spokesperson for Joybuy said the company aims to “change the way people shop online” by removing the longstanding compromise between affordability and delivery speed. “British shoppers have long had to settle for a trade-off between price and speed,” they said. “We’re here to change that.”

The expansion comes at a time when JD.com is seeking growth outside its domestic Chinese market, where consumer demand has softened and competition has intensified. The company, which has a market capitalisation of more than $40 billion, has been actively exploring international opportunities as part of a broader diversification strategy.

Its interest in the UK is not new. The group previously attempted to acquire Argos from Sainsbury’s and held discussions around a potential deal with Currys, although neither transaction materialised. The Joybuy launch represents a shift from acquisition-led expansion to organic market entry, allowing JD.com to build its presence on its own terms.

However, analysts caution that replicating its Chinese logistics model in Europe will not be straightforward. The UK’s fragmented retail landscape, regulatory environment and established competition present significant barriers to scaling quickly. Amazon, in particular, retains a dominant position, underpinned by its Prime ecosystem, extensive fulfilment network and deep customer loyalty.

Even so, JD.com’s entry introduces a new competitive dynamic into the UK e-commerce market. Its willingness to invest heavily in infrastructure and absorb delivery costs could place pressure on incumbents, particularly if consumers respond positively to faster delivery without additional fees.

The move also reflects a broader shift in online retail, where speed is increasingly becoming a key differentiator. As consumer expectations evolve, same-day delivery is moving from a premium offering to a baseline expectation in major urban markets.

JD.com’s chairman, Liu Qiangdong, has previously acknowledged that the company has faced a challenging period in recent years, describing the past five years as the least productive of his entrepreneurial career. The UK launch of Joybuy suggests a renewed push for growth, and a belief that international markets can provide the next phase of expansion.

For British consumers, the arrival of Joybuy could signal the start of a new era in e-commerce competition — one where delivery speed, pricing and platform experience are being redefined simultaneously.

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JD.com launches Joybuy in UK with same-day delivery challenge to Amazon

Chancellor Rachel Reeves has pledged to halt the flow of British technology companies and scientific talent overseas, warning that the long-standing pattern of firms “drifting abroad” must come to an end as part of a broader push to revitalise UK economic growth.

Speaking ahead of a major address to business leaders in London, Reeves said the government would invest £2.5 billion into artificial intelligence and quantum computing to strengthen the UK’s position as a global technology hub and ensure more homegrown innovation scales domestically rather than relocating to markets such as the United States.

The intervention reflects growing concern within government and industry that the UK is failing to retain its most promising tech businesses. While Britain continues to produce world-class startups and research, many ultimately move overseas in search of deeper capital markets, more favourable tax regimes and stronger institutional backing.

Reeves, speaking from the National Quantum Computing Centre, said her economic strategy was designed to reverse that trend through what she described as a more “strategic and active state”, combining targeted investment with regulatory stability and stronger international partnerships.

At the centre of that strategy is a significant bet on next-generation technologies. Quantum computing, widely regarded as the next frontier of computational power, is expected to underpin advances across sectors from pharmaceuticals to finance, while AI is already reshaping productivity, automation and decision-making across the economy.

Reeves is expected to argue that the UK can achieve the fastest rate of AI adoption in the G7, positioning the country at the forefront of a technological shift that could define global competitiveness over the coming decade. She will also highlight the potential for quantum technologies to generate up to 100,000 jobs, framing the investment as both an economic and industrial strategy.

However, the chancellor’s ambitions come against an increasingly challenging macroeconomic backdrop. The escalation of conflict in the Middle East has already triggered sharp rises in oil and gas prices, raising fears of renewed inflationary pressure and a slowdown in growth, factors that could complicate the government’s efforts to stimulate investment and innovation.

Reeves acknowledged the risks, noting that global energy security had become a central concern as disruption to key supply routes, including the Strait of Hormuz, continues to reverberate through international markets. She confirmed that decisions on major North Sea oil developments, including Rosebank and Jackdaw, would be taken “soon”, though stopped short of committing to accelerated domestic production.

Instead, she pointed to a broader strategy of energy resilience, including closer cooperation with European partners. Plans to deepen integration with EU energy markets are expected to form part of a wider post-Brexit reset aimed at reducing costs and improving supply stability.

That approach extends beyond energy into the regulatory sphere. Reeves is expected to signal a willingness to align the UK more closely with EU rules in selected areas where it supports growth, jobs and investment. While alignment in food and agricultural standards has already been proposed to reduce trade friction, the speech is likely to open the door to similar moves in sectors such as chemicals, manufacturing and advanced industry.

The prospect of closer alignment has already drawn political criticism. Opposition figures argue that the strategy risks diluting the benefits of Brexit, with shadow chancellor Sir Mel Stride accusing the government of attempting to “drag” the UK back towards EU frameworks rather than addressing domestic economic challenges.

Yet for business leaders, particularly in the technology sector, the question is less ideological and more structural. The UK’s ability to retain high-growth companies has long been constrained by gaps in scale-up funding, pension fund participation and the perceived competitiveness of the London Stock Exchange compared with US markets.

Reeves’ intervention appears designed to address those concerns directly, positioning the UK as a place not just to start a business, but to grow and globalise one. By combining public investment, regulatory pragmatism and international cooperation, the government hopes to create an environment in which British innovation can remain anchored at home.

Whether that ambition can be realised will depend not only on policy execution but on the wider economic climate. With geopolitical instability, energy price volatility and shifting global capital flows all in play, the race to retain and scale technology businesses is becoming increasingly competitive.

For now, Reeves is making clear that the UK intends to be an active participant in that race, and that allowing its most valuable companies to slip overseas is no longer an acceptable outcome.

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Reeves vows to stop UK tech ‘drifting abroad’ with £2.5bn AI and quantum push

Hundreds of new jobs are set to be created across the UK as a wave of Nigerian banks, fintech companies and creative industry businesses expand their operations in Britain, bringing millions of pounds of new investment into the economy.

The announcements come ahead of a historic state visit by Bola Ahmed Tinubu and First Lady Oluremi Tinubu (pictured), which is expected to further strengthen economic ties between the two countries. The investments underline the growing importance of the UK as a hub for African business while highlighting Nigeria’s expanding role as a source of innovation, entrepreneurship and capital.

Several Nigerian financial institutions are significantly expanding their UK presence, with the banking sector expected to be a major driver of new employment. Zenith Bank has opened a new branch in Manchester, creating up to 30 direct jobs and providing a boost to the North West economy. The bank is also exploring a potential listing on the London Stock Exchange in 2027 as it seeks to deepen its presence in British financial markets and strengthen investment flows between the UK and Africa.

Other Nigerian financial institutions are also increasing their footprint in Britain. Fidelity Bank plans to double its UK workforce from 62 employees during 2026 while expanding its capital base. The broader Fidelity Group is also positioning London as its global operational hub. Meanwhile First City Monument Bank has chosen the UK as the first international launch market for its new digital cross-border payments platform, designed to streamline trade and financial transfers between Africa and global markets.

In total, seven Nigerian banks now operate in the UK, collectively supporting around 1,000 jobs while strengthening financial links between the two economies.

Alongside traditional banking, Nigeria’s rapidly growing fintech sector is investing heavily in the UK as a base for global expansion. LemFi has announced plans to invest £100 million over the next five years after designating London as its global headquarters. The investment will support product development, technology infrastructure and the expansion of its international workforce.

Digital banking platform Moniepoint is also expanding its London operations, with plans to grow its UK-based team to around 100 employees in 2026 as it builds infrastructure supporting millions of users across Africa. Similarly, Kuda Bank is strengthening its UK headquarters as the centre of its international expansion strategy and expects to significantly increase its staff numbers in Britain over the coming year.

Government ministers say the wave of investment reflects the strength of the UK–Nigeria economic partnership and Britain’s continued attractiveness as a destination for global businesses. Peter Kyle said the growing links between the two countries demonstrated the power of collaboration between their business communities.

“The UK and Nigeria share a belief in the power of enterprise, innovation and education to transform lives,” he said. “Today’s commitments show exactly that. With Nigerian firms creating jobs across the UK and British businesses expanding into one of the world’s fastest-growing markets, our partnership is strengthening both economies.”

David Lammy added that the partnership between the two countries was delivering new opportunities for businesses and innovators on both sides of the relationship.

“The UK and Nigeria’s strategic partnership is bringing momentum and opportunity to innovators in both our countries,” he said. “We are reducing barriers, creating jobs and opening new pathways for growth.”

The investments are being supported through the UK–Nigeria Enhanced Trade and Investment Partnership, which focuses on expanding cooperation across financial services, technology, infrastructure and education.

The creative industries are also playing a growing role in the strengthening relationship between the two countries. EbonyLife will launch EbonyLife Place London, a new cultural and entertainment venue expected to create around 40 jobs and showcase African creative talent in the UK.

The partnership between the countries’ creative sectors is expected to deepen further through initiatives such as a UK–Nigeria advertising summit and talent exchange programme, as well as a planned UK/Nigeria Season of Culture in 2028 organised in collaboration with the British Council.

British companies are also expanding into Nigeria as part of the strengthening economic relationship. Twinings Ovaltine has opened a £24 million manufacturing facility in Lagos, its first production site in Africa, which will create more than 100 jobs and expand exports across West Africa.

Meanwhile the fintech company Wise is expected to receive regulatory approval for its first licence in Nigeria, allowing it to expand into the country’s fast-growing remittance market.

Educational partnerships are also increasing, with leading UK universities deepening collaboration with Nigerian institutions. The University of Birmingham and the University of Lagos have signed an agreement to develop programmes in applied artificial intelligence, digital communications and global surgery. The London School of Economics has launched a new data science partnership with Nile University of Nigeria, while the University of the West of England has opened a dedicated office in Lagos.

Further collaboration in education will come with the opening of Wellington College International in Lagos in 2027, which will provide places for around 1,500 students and become one of West Africa’s flagship British curriculum schools.

Officials say the breadth of the investments, spanning finance, technology, creative industries and education, highlights the deepening commercial relationship between the UK and Nigeria. As global economic uncertainty grows, policymakers hope that strengthening partnerships with fast-growing markets such as Nigeria will help drive long-term investment, innovation and job creation across the British economy.

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Nigerian firms announce millions in UK investment as hundreds of jobs set to be created

Virgin StartUp has announced a new £20 million funding pot to support UK entrepreneurs in the coming financial year, marking the organisation’s largest annual allocation since partnering with the British Business Bank in 2013.

The funding will be made available between 1 April 2026 and 31 March 2027 through the government-backed Start Up Loans programme and is designed to widen access to early-stage finance for aspiring founders across the UK.

The announcement also marks a significant milestone for Virgin StartUp, which has now distributed more than £100 million in Start Up Loans funding since the partnership began more than a decade ago. Over that period the not-for-profit organisation has supported more than 6,500 entrepreneurs to launch and grow businesses across a wide range of sectors.

Businesses that received early backing through the programme include well-known consumer brands and technology ventures such as sportswear label Castore, ethical skincare company Upcircle, drinks brand DASH Water, AI fitness scale-up Magic AI and sustainable food subscription service Oddbox.

According to Virgin StartUp, the loans delivered through its programme have generated an estimated £550 million in economic value for the UK, equating to a return of £5.50 for every £1 invested.

The organisation also reports that 69 per cent of businesses supported through its Start Up Loans funding remain trading after five years, significantly higher than the national average of 43 per cent, suggesting founders who access the programme are around 60 per cent more likely to survive their early years in business.

Andy Fishburn MBE, managing director at Virgin StartUp, said the new funding would allow the organisation to back more founders at a time when early-stage capital has become increasingly difficult to secure.

“With over £20 million in Start Up Loan funding to deploy this year, we’ll be supporting and funding more founders than ever before,” he said. “Early-stage funding has never been harder to come by, so this investment will help entrepreneurs turn bold ideas into sustainable businesses at a critical moment for the UK economy.”

Fishburn added that the programme is open to individuals launching their first business, developing side ventures or growing young companies that have been trading for up to five years.

Beyond financial support, entrepreneurs receiving loans are also paired with dedicated business advisers who guide them through the application process and provide mentoring during the first year after funding.

Participants also gain access to Virgin StartUp’s wider entrepreneurial network, which offers mentoring, peer support, training opportunities and industry events designed to help founders build and scale their businesses.

The programme has also placed a strong emphasis on improving access to entrepreneurship for underrepresented groups. In 2019 Virgin StartUp launched a 50/50 pledge committing to fund equal numbers of male and female founders.

Since that pledge was introduced, women have accounted for 46 per cent of successful funding recipients through the programme. Over the past six months, female founders have made up exactly half of all successful applicants.

Louise McCoy, managing director of Start Up Loans products at the British Business Bank, said the partnership with Virgin StartUp continues to play an important role in supporting the UK’s entrepreneurial ecosystem.

“We are delighted with the success Virgin StartUp continues to achieve as a partner of the Start Up Loans programme,” she said. “Their commitment to supporting an equal number of male and female founders aligns closely with our own objectives.

“Together we are helping thousands of businesses across the UK access the affordable finance they need to start up or grow.”

The new £20 million funding allocation comes at a time when many entrepreneurs face tighter venture capital markets and rising borrowing costs, making government-backed lending schemes an increasingly important source of early-stage finance.

Virgin StartUp said the additional funding would allow it to expand its reach further across the UK, ensuring more founders from diverse backgrounds and communities can access both capital and expert guidance.

Fishburn added that broadening access to entrepreneurship remains central to the organisation’s mission.

“We believe entrepreneurship should be open to everyone with the drive to build something of their own,” he said. “Our goal is to ensure great ideas, wherever they come from, have a genuine opportunity to succeed.”

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Virgin StartUp unveils £20m funding pot for UK founders after passing £100m Start Up Loans milestone

Artificial intelligence could generate more than £105 billion in additional revenue for the UK’s mid-sized companies by the end of the decade, according to new economic modelling that highlights how rapidly AI is reshaping the country’s business landscape.

The research, conducted by the Centre for Economics and Business Research (Cebr) on behalf of HSBC UK, suggests that businesses embedding AI across their operations are beginning to pull away from competitors that are slower to adopt the technology.

Alongside the report, HSBC UK has launched a £5 billion AI & Productivity Financing Initiative aimed at helping businesses invest in the technology, skills and systems required to deploy AI at scale.

The analysis focuses on Britain’s mid-sized businesses, companies with annual revenues between £15 million and £300 million, often described as the “engine room” of the UK economy because of their ability to combine the agility of smaller firms with the investment capacity of larger organisations.

There are around 35,000 such companies operating across the UK. In 2025 they generated 23 per cent more value per employee than the wider economy, highlighting their growing importance as a driver of productivity and growth.

The research indicates that AI is increasingly becoming a dividing line between firms that are accelerating ahead and those at risk of falling behind.

Two years ago, only around 35 per cent of mid-sized companies were using AI in some form. By the end of 2025 that figure had climbed sharply to 55 per cent, reflecting the rapid mainstream adoption of large language models, advanced analytics and workflow automation tools across many industries.

However, the report notes that a clear distinction exists between businesses experimenting with AI and those embedding it deeply within core business functions.

Approximately 24 per cent of mid-sized companies are now classified as “productive adopters”, organisations integrating AI into critical processes such as forecasting, supply chain management, reporting, customer engagement and operational decision-making.

These companies are seeing measurable improvements in both productivity and revenue.

According to the research, firms that integrate AI into their operations experience an average increase of around four per cent in revenue per employee.

For the typical mid-sized business, this could translate into an additional £4.5 million in revenue and roughly £1.3 million in additional economic value within four years compared with companies that have not yet adopted the technology.

If adoption continues at its current pace, the cumulative impact could be significant. The modelling suggests AI-driven productivity gains across the mid-market could add £105 billion in additional revenue and £31 billion in economic output to the UK economy by 2030.

Looking further ahead, the study estimates that AI adoption among mid-sized firms could generate more than £500 billion in additional turnover by 2050, although gains are expected to slow as the technology becomes widely embedded across industries.

James Cundy, managing director and head of corporate and leveraged finance at HSBC UK, said the findings highlight the growing importance of AI investment for business competitiveness.

“Mid-sized businesses play a central role in UK growth,” he said. “Our findings suggest AI adoption could strengthen one of the economy’s most important growth engines.

“The opportunity is significant, but it requires confidence to invest. Our focus is on supporting businesses as they invest in the technology, skills and innovation that will shape the UK’s next phase of growth.”

Through the new financing initiative, HSBC aims to provide businesses with access to funding on commercial terms to support AI investment across areas including digital infrastructure, data systems, workforce training and automation.

Cundy emphasised that the biggest gains are coming from companies that move beyond experimentation and integrate AI into their decision-making and operational processes.

“The distinction between experimentation and integration is critical,” he said. “Businesses that apply AI to operations, workforce processes and strategic decisions are seeing measurable improvements in productivity and revenue.”

Economists say the research underlines the growing role of technology in shaping productivity outcomes across the UK economy.

Nina Skero, chief executive of the Centre for Economics and Business Research, said the findings suggest the mid-market still has considerable room to benefit from AI-driven productivity improvements.

“Our research shows AI is already beginning to influence productivity outcomes among mid-sized firms in a meaningful way,” she said.

“However, productive adopters remain a minority within the mid-market. That indicates there is still significant headroom for growth. If more companies move from early adoption to deeper integration, the combined impact on UK productivity and national output could be substantial by the end of the decade.”

The report concludes that the pace at which companies move from experimentation to full integration will ultimately determine how much of the potential £105 billion opportunity is realised.

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AI adoption could unlock £105bn revenue boost for UK mid-sized firms by 2030

London-based biotechnology startup Ternary Therapeutics has secured £3.6 million in seed funding to accelerate the development of its artificial intelligence-driven platform designed to engineer a new class of medicines known as molecular glues.

The funding round was led by European venture capital firm daphni, with participation from Pace Ventures, i&i Biotech Fund and the UK Innovation & Science Seed Fund, which is managed by Future Planet Capital. The investment will support the expansion of Ternary’s AI platform, its research team and its early drug development programmes.

Founded in November 2024 and headquartered in London, Ternary Therapeutics is developing a technology platform that combines machine learning, physics-based molecular modelling and rapid laboratory validation to design molecular glues — a promising but still emerging category of drugs that can target proteins previously considered undruggable.

Unlike traditional medicines, which typically work by binding directly to a target protein and inhibiting its function, molecular glues operate by bringing two proteins together to trigger the destruction or modification of disease-causing proteins. This mechanism has become one of the most exciting areas of drug discovery in recent years, particularly in fields such as cancer, autoimmune disorders and neurological diseases.

However, most molecular glues discovered to date have emerged largely by accident during broader drug discovery programmes rather than through deliberate design. Ternary aims to change that dynamic by applying computational methods and artificial intelligence to turn molecular glue discovery into a systematic engineering process.

The company’s platform uses AI models to predict how proteins behave within the body and identify potential molecules capable of binding them together. These candidate molecules are then tested experimentally in the laboratory, with the results fed back into the system to improve the predictive accuracy of the models.

By repeating this cycle of computational prediction and experimental validation, Ternary hopes to dramatically accelerate the discovery of new medicines and open up drug targets that have historically been inaccessible to conventional pharmaceutical approaches.

Dr Chris Tame, co-founder and chief executive of Ternary Therapeutics, said the company’s goal is to transform molecular glue discovery from a matter of luck into a scalable design discipline.

“Molecular glues have delivered some of the most exciting breakthroughs in drug discovery over the past decade, but historically they’ve been discovered largely by chance rather than through a systematic process,” he said.

“Our platform is designed to change that by combining physics-informed AI with rapid experimental validation to engineer these molecules intentionally and at scale. That allows us to approach drug discovery more like an engineering problem than a process of trial and error.”

Tame said the new capital would allow the company to expand its computational infrastructure, grow its scientific team and advance its most promising programmes towards preclinical development, while also laying the groundwork for partnerships with global pharmaceutical companies.

The company has already developed an early pipeline of programmes focused on inflammatory and neuroinflammatory diseases and has established research collaborations with several biotechnology and pharmaceutical partners.

Investors believe the technology could help unlock a significant new frontier in drug discovery.

Cristian Pinto, investor at daphni, said designing molecular glues predictably represents one of the most complex scientific challenges in modern medicine.

“Ternary has built a disciplined platform that integrates machine learning, physics and experimental biology to tackle that challenge,” he said.

The investment also reflects growing momentum across the biotechnology sector around targeted protein degradation, an approach that seeks to eliminate disease-causing proteins rather than simply blocking their activity.

Oliver Sexton, investment director at the UK Innovation & Science Seed Fund, said advances in artificial intelligence and computational power are enabling researchers to understand biological systems with far greater precision than ever before.

“Ternary’s approach to drug design is enabled by its compute power,” he said. “The combination of expanding knowledge of biology and recent developments in AI allows it to understand massive complexity and generate molecular glue drug candidates that target areas historically considered out of reach.”

A large proportion of proteins involved in human disease lack obvious drug-binding sites, limiting the effectiveness of traditional drug design approaches. Molecular glues offer an alternative route by creating entirely new interactions between proteins inside cells.

If platforms like Ternary’s succeed in designing these interactions reliably, they could significantly expand the number of treatable diseases and unlock major new opportunities for collaboration between biotechnology startups and large pharmaceutical companies.

The investment in Ternary comes amid rising global interest in AI-driven drug discovery, as advances in machine learning and structural biology reshape the economics and speed of pharmaceutical research.

With fresh capital now secured, the company plans to accelerate development of its platform while advancing its first therapeutic candidates toward clinical readiness.

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UK biotech Ternary raises £3.6m to scale AI platform for next-generation drugs

Thousands of British expatriates fleeing the escalating conflict in the Middle East are urging the UK government to clarify whether they could face unexpected tax bills after returning to Britain earlier than planned.

Tax specialists warn that some of the roughly 160,000 British nationals living across the region, including many based in Dubai, may inadvertently breach the UK’s tax residency rules if their emergency return pushes them over the 183-day threshold spent in the country during the current financial year.

The UK tax year ends on April 5, meaning the timing of the crisis could have significant financial consequences for expatriates who were already close to the residency limit before the conflict intensified.

Under the UK’s statutory residence test, individuals who spend 183 days or more in Britain within a tax year are generally considered UK tax residents. If that threshold is crossed, global income, including earnings generated overseas, may become liable for UK taxation.

For many British expatriates who relocated to the United Arab Emirates specifically to benefit from its largely tax-free regime, such a change in residency status could create a substantial and unexpected tax liability.

The concern has been amplified by the sudden deterioration of the security situation across parts of the Gulf following US-Israeli attacks on Iran and retaliatory strikes by Iranian forces. Drone attacks have reportedly targeted infrastructure in the UAE, including areas of Dubai, prompting some expatriates to temporarily return to Britain with their families.

Sandra Jeevan, a partner at accountancy firm UHY Hacker Young, said the situation has created significant anxiety for expatriate families who left the region primarily for safety reasons.

“We are hearing from many families who never intended to return to the UK this year but now have had no choice,” she said. “They could face exposure to UK tax simply because their emergency return alters their UK residence position.

“When you are trying to move your family to safety, you are not focused on day-count rules or technical residence tests.”

The UK’s tax rules do allow limited flexibility in certain circumstances. HM Revenue & Customs permits individuals to disregard up to 60 days spent in the UK if those days arise due to “exceptional circumstances” beyond their control.

Events such as war, civil unrest, natural disasters or sudden travel restrictions can potentially qualify under this provision. However, tax advisers warn that the exemption is narrow and subject to strict interpretation.

For example, HMRC guidance states that remaining in the UK for personal reasons after the immediate crisis has passed, such as staying with family or delaying a return abroad, may not be treated as an exceptional circumstance.

This creates uncertainty for expatriates who may initially return for safety but remain in Britain for several weeks while assessing the evolving situation in the region.

Nimesh Shah, chief executive of advisory firm Blick Rothenberg, said the number of enquiries from UAE-based expatriates has risen sharply in recent weeks.

“I’ve had a disproportionate number of calls from people wanting to leave the UAE,” he said. “But I’ve advised them not to rely too heavily on the exceptional circumstances provisions.

“HMRC is likely to take the view that people chose to move abroad primarily to benefit from a low-tax environment. It may therefore be reluctant to allow extended periods back in the UK without triggering residency consequences.”

As a result, some expatriates are reportedly considering temporary relocation to other countries rather than returning directly to Britain. Countries such as Ireland or France are being explored as short-term alternatives that would allow individuals to remain outside the UK long enough to avoid breaching the 183-day rule.

The issue highlights the complex interaction between international mobility and tax residency rules at times of geopolitical crisis.

While the UAE has become a major destination for British professionals over the past decade, particularly in sectors such as finance, property and technology, the region’s exposure to geopolitical tensions means that sudden relocations can quickly create tax complications.

A spokesperson for HM Revenue & Customs said the existing framework already provides protections for individuals caught up in extraordinary situations.

“The existing rules provide the right protection while following the basic principle that individuals living in the UK should pay tax in the UK,” the spokesperson said.

“Exceptional circumstances, such as being affected by a war, are taken into account.”

However, advisers say greater clarity from the government would help provide reassurance to expatriates making urgent decisions about their safety.

With the end of the tax year approaching rapidly, many affected individuals are now seeking urgent professional advice to assess their residency status and determine whether emergency travel could leave them facing a significant UK tax liability.

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British expats fleeing Middle East conflict fear unexpected UK tax bills

Britain’s largest car park operator, National Car Parks (NCP), has taken the first formal step toward administration, putting more than 1,000 jobs at risk and raising fresh questions about the future of hundreds of parking facilities across the UK.

Documents lodged at the High Court in London show that the company has filed a notice of intention to appoint administrators. The filing, made at 10.01am, provides the business with temporary legal protection from creditor actions while it attempts to stabilise its financial position or explore restructuring options.

The move signals deep financial strain at a company that operates more than 800 parking sites nationwide, serving millions of drivers each year and working with a range of private landowners, councils and commercial clients.

An intention to appoint administrators is typically used by businesses facing mounting financial pressure, granting them a short window, usually around ten days, to negotiate with lenders, explore refinancing options or prepare for a formal administration process.

If the company ultimately enters administration, the outcome could threaten the future of more than 1,000 jobs across its operations and potentially disrupt services at hundreds of car parks across the country.

The development is likely to send shockwaves through local authorities and commercial partners that rely on the operator to manage public and private parking facilities.

Financial pressures have been mounting in recent years. Accounts show the company generated revenues of £187 million in the financial year ending 2023, representing a decline of more than 7 per cent compared with the previous year.

The company has also faced public scrutiny and criticism over its parking enforcement practices. Private parking operators across the UK have dramatically increased the number of penalty notices issued to motorists, with figures showing that drivers are now receiving nearly 40,000 parking charges a day.

Data from the Driver and Vehicle Licensing Agency (DVLA) revealed that private parking firms requested vehicle ownership details a record 14.37 million times during the 2024–25 financial year. That equates to an average of around 39,375 requests per day, allowing companies to issue parking charge notices of up to £100 for alleged violations such as overstaying time limits.

Parking operators must obtain vehicle ownership information from the DVLA in order to send fines by post, paying £2.50 per request for access to the database.

NCP itself has faced several high-profile controversies relating to fines in recent years. In February last year the company apologised after incorrectly issuing a £100 penalty to a grandfather who had parked for just 14 minutes in a car park in Darlington, County Durham, despite signage stating that customers were entitled to 90 minutes of free parking. The fine was later cancelled.

The company has also faced financial disputes with local authorities. In 2024, Bolton Council wrote off nearly £1.5 million in debts owed by the firm dating back to the pandemic period.

Legal representatives from the law firm Reynolds Porter Chamberlain, which is acting for the company, said a statement would be issued later regarding the situation.

Industry observers say the potential collapse of such a large operator reflects broader challenges in the parking sector, including rising operational costs, tighter regulation and increasing scrutiny of private parking enforcement.

For motorists, private parking charges have become increasingly common across locations such as supermarkets, shopping centres, business parks, motorway service areas and restaurant sites.

While the notice filed in court does not guarantee that the company will enter administration, it indicates that its financial position has become severe enough to require urgent restructuring discussions.

If a rescue deal cannot be secured during the protection period, administrators could be formally appointed within days, placing the future of Britain’s largest car park operator in doubt.

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NCP faces administration as Britain’s largest car park operator files court notice