Business

Rachel Reeves is facing a mounting revolt from Britain’s business leaders, with chiefs across sectors warning that her tax hikes and labour reforms are throttling investment, driving out wealth, and tipping the economy toward recession.

BT chief executive Allison Kirkby (pictured) warned this week that Britain is already at “peak government-inflicted costs.” Speaking at the Connected Britain conference, she revealed that BT pays ten times more in business rates, energy levies and compliance costs than rivals in Germany or the Netherlands. She said that investors need certainty on fiscal policy but Reeves’s approach risks deterring much-needed capital. The telecoms giant is already on the hook for an extra £100 million annually after the Chancellor’s last budget raised the minimum wage and employer national insurance contributions.

JD Sports boss Régis Schultz has also urged Reeves not to make Britain uncompetitive by further hiking staff costs. Warning of unemployment “going in the wrong direction,” Schultz said young consumers — JD’s key customers — would be hit hardest if labour costs rise again. JD’s profits have slumped as the group faces weak US demand and tariff uncertainty, but Schultz insisted the Chancellor must avoid adding to the pressure: “That is our plea. Don’t increase the cost of labour.”

AO World founder John Roberts issued perhaps the starkest warning, telling the BBC: “We’ve lived through a few recessions in the last 25 years – I think we’re heading into another one.” Roberts slammed Reeves’s workers’ rights bill — particularly “day one” rights for new employees — as a barrier to job creation. He also railed against the government’s tax burden, saying wealth was “leaving the UK in incredible amounts” as entrepreneurs flee.

The restaurant empire of celebrity chef Rick Stein is also struggling. Revenues fell by £1.3m in 2024, and losses more than doubled as customer numbers dwindled. Directors blamed Reeves’s changes to employer national insurance, warning the “service-led nature” of hospitality means the sector is being disproportionately squeezed. With nearly 90,000 hospitality jobs already lost since last October’s Budget, Stein’s managing director Ian Fitzgerald called on Reeves to “ease our financial pressures” in November to avoid further closures.

The warnings add to a drumbeat of concern from across UK plc. From telecoms and retail to hospitality and manufacturing, bosses are painting a picture of rising costs, eroded competitiveness and a fragile economy that could tip into recession if Reeves presses ahead with further tax hikes in November’s budget.

Read more:
Britain’s business backlash: CEOs warn Reeves’s tax hikes are pushing UK to the brink

The pound fell sharply on Wednesday after Andrew Bailey suggested the Bank of England could cut interest rates if inflation eases further, in remarks that underscored the fragility of the UK economy.

Sterling slipped 0.7 per cent against the dollar to $1.34 after the governor said there was “a further journey down” possible for borrowing costs, though any cuts would hinge on the inflation outlook. “It will depend on the path of inflation going down,” Bailey said in an interview during a visit to the West Midlands.

His words immediately spooked currency traders, who saw a growing chance of lower rates ahead. While the pound remains more than 7 per cent stronger against the dollar since January, its weakness this week reflects fears the UK recovery is faltering.

Bailey pointed to subdued consumer demand as a key drag. “People are being quite cautious at the moment. Of course, that affects spending … People aren’t going out as much; they’re not shopping as much; they’re not going out to restaurants and so on as much,” he said.

The comments follow grim data showing UK retail sales last month were 2.1 per cent below pre-pandemic levels, while GDP flatlined in July. Inflation, meanwhile, has proved stubborn, stuck at 3.8 per cent in July and August — its highest in 19 months. The Bank of England expects a peak of 4 per cent in September.

Markets broadly expect the central bank to hold rates at 4 per cent for the rest of the year, but Bailey’s hint that cuts could be on the table if inflation subsides has added new uncertainty.

Government borrowing costs were little moved, with 30-year gilt yields steady at 5.5 per cent. Against the euro, sterling edged up 0.06 per cent to €1.14 but remains 5 per cent down since the start of the year.

Read more:
Pound Slides as Bailey Hints at Rate Cuts If Inflation Falls

The government is weighing extraordinary measures to shield Britain’s manufacturing base from the fallout of Jaguar Land Rover’s crippling cyberattack, including buying up parts from suppliers to prevent mass job losses.

Business Secretary Peter Kyle is understood to be considering a scheme where ministers would purchase parts from JLR’s 700-strong supplier network and sell them back once production resumes. The move comes after a hack on 31 August forced JLR, owned by India’s Tata Motors, to freeze output across plants in the UK, Slovakia, Brazil and India.

The shutdown, now entering its fourth week, has cost the carmaker and its supply chain hundreds of millions of pounds. Unions have warned that the stoppage poses an existential threat to smaller suppliers reliant on JLR’s “just in time” schedules, with some already pausing production and sending workers home.

JLR has scrambled to keep its network afloat, reportedly paying £300m to partners in recent days and assigning 50 staff to manually process payments. But with no end yet in sight, pressure is building on ministers to intervene.

Kyle told workers earlier this week: “Getting JLR back online as soon as possible is my top priority, providing much-needed certainty to workers and suppliers.”

A government purchase scheme would face hurdles, including limited storage capacity for the vast volumes of car parts, and the assumption that JLR’s lost production does not translate into permanent lost sales.

The cyberattack has struck at a vulnerable moment for JLR. The carmaker’s pre-tax profits plunged 49% to £351m in the three months to June as US tariffs bit, while new electric models are delayed until next year. The group, which employs 32,800 in the UK, has also just announced a change in leadership, with Tata Motors finance chief PB Balaji set to replace Adrian Mardell as chief executive in November.

Read more:
Government could buy Jaguar Land Rover parts to prevent job losses after cyberattack

The Co-op has revealed that a “sophisticated cyberattack” earlier this year has wiped out £80m of profits, underlining the mounting cost of cybercrime for Britain’s biggest companies.

In results published this morning, the mutual said the hack disrupted its grocery and funeral operations, leaving gaps on shelves and delaying services, with an estimated £206m hit to revenues.

The group said it acted “quickly and decisively” by temporarily shutting down a number of systems to contain the breach. Essential services, including funerals, were prioritised, while stock was diverted to rural “lifeline” stores and independent society partners to minimise disruption.

The direct financial blow included £20m in one-off costs to tackle the incident, alongside wider business losses. The Co-op also sought to ease customer frustration by giving members a £10 discount on a £40 shop.

The figures highlight how cyberattacks are becoming a serious balance-sheet issue for large corporates. The Co-op is the latest big name to join a growing list of firms caught in the crosshairs this year.

Read more:
Co-op hack wipes out £80m of profits as cybercrime surge hits UK businesses

Forget bricks and mortar — from Oscars to rare whisky, luxury assets are becoming the new collateral of choice in Britain’s growing bridging market.

Suros Capital, a specialist in lending against high-value possessions, is carving out a niche by financing deals secured against everything from Warhol paintings and Rolex watches to gold bullion and Banksy prints.

Ray Palmer, director at Suros, told Business Matters the firm’s loan book includes some of the strangest transactions in the market. Among them: a £6m loan against 21,000 bottles of wine stored in a Second World War bunker, a £60,000 Macallan whisky bottle, and even an Academy Award. Other approaches — ultimately rejected — included racehorses, Fabergé eggs and a bizarre offer of 50 tonnes of dirt supposedly containing 2% gold.

But the glamour comes with unique challenges. Unlike property, where value and authenticity are straightforward, luxury asset lending requires rigorous checks. “We have to prove that a Rolex is a genuine Rolex or that a wine can be traced back to the vineyard,” Palmer explained. “Forgery in the art world is rife, so we use everything from auction history to x-rays and UV light to authenticate items.”

Suros relies on a network of auction-house professionals and maintains its own £30m cash vault with £300m of insured jewellery inside to secure loans. Despite the eccentric assets, Palmer says the principles remain the same: speed, valuation, and risk control.

The firm believes lending against art could grow as sellers hold onto pieces during a market downturn, using them as security instead of offloading at low prices. Still, managing expectations remains tough. “Most people overestimate what their assets are worth,” Palmer admitted.

Read more:
Oscars, Warhols and whisky: inside the weird world of luxury asset lending

Lloyds Banking Group will close another 49 branches across its Lloyds Bank, Halifax and Bank of Scotland brands next year, in the latest blow to Britain’s high streets.

The closures, which will take place between January and October 2026, mark a further retreat from in-person banking as millions of customers move online. Lloyds said the shift reflects changing habits, with 21 million people now using its apps to manage their money.

The move will see 26 Lloyds branches, 10 Halifax branches and 13 Bank of Scotland branches shut their doors. Locations range from Tain in the Scottish Highlands, scheduled to close on January 12, to Wandsworth, London, set to close on January 15.

The group said all affected staff would be offered alternative roles. It will still have 705 branches remaining nationwide: 359 Lloyds, 269 Halifax and 77 Bank of Scotland.

To offset the closures, Lloyds has pledged to support cash access in affected communities. Link, the UK’s cash machine network, has recommended 11 new banking hubs in towns including Buxton, Camborne, Chepstow, Deal, Gorseinon, Grangemouth, Harborne, Hawick, Ryde, Stamford and Totton. Customers can also use Post Offices and more than 30,000 PayPoint locations to access banking services.

The announcement comes just a week after NatWest said it would axe 46 mobile branches across the UK, underlining the scale of the shift towards digital banking.

Lloyds insisted the closures were part of its strategy to “bring together the best in digital convenience with our people.” A spokesperson said: “Alongside our app, our customers can use any Lloyds, Halifax or Bank of Scotland branch, the Post Office or banking hubs for their everyday banking.”

Bank branches set for closure

Alfreton, Derbyshire – January 19

Ammanford, Carmarthenshire, Wales – January 12

Bideford, Devon – January 13

Harborne, West Midlands – October 9

Camborne, Cornwall – October 7

Chepstow, Monmouthshire, Wales – October 7

Chester-le-Street, Co Durham – January 14

Deal, Kent – January 22

Fleet, Hampshire – January 13

Gillingham, Dorset – January 8

Gorseinon, Swansea, Wales – October 12

Havant, Hampshire – January 19

Hedge End, Hampshire – January 21

Hedon, Yorkshire – January 28

Ivybridge, Devon – January 14

Lewes, East Sussex – January 19

Mitcham, London – January 8

New Addington, London – January 14

Okehampton, Devon – March 25

Penzance, Cornwall – January 21

Petersfield, Hampshire – January 21

Ryde, Isle of Wight – January 21

Stamford, Lincolnshire – January 20

Swadlincote, Derbyshire – January 20

Buxton, Derbyshire – January 20

Totnes, Devon – January 8

Totton, Hampshire – January 19

Deal, Kent – January 22

Hastings, East Sussex – January 22

Havant, Hampshire – January 15

Middleton, Greater Manchester – January 8

Seaford, East Sussex – January 19

Skipton, Yorkshire – January 26

Wandsworth, London – January 15

Yeovil, Somerset – January 12

Bellshill, North Lanarkshire – January 12

Castle Douglas, Dumfries and Galloway – January 22

Dingwall, Easter Ross – March 25

Erskine, Renfrewshire – January 13

Gairloch, Wester Ross, – January 15

Glasgow Anniesland – January 12

Grangemouth, Falkirk – October 9

Hawick, Roxburghshire – October 7

Largs, North Ayrshire – March 25

Larkhall, South Lanarkshire – January 8

Nairn, Highlands – January 20

St Andrews, Fife – January 20

Tain, Highlands – January 12

Read more:
Lloyds to axe 49 more branches as high street banking collapse deepens

When people think about London’s economy, manufacturing is not usually the first sector that comes to mind.

Yet more than 14,000 manufacturing businesses operate across the capital, many of them micro or small enterprises concentrated in a number of clusters across the city such as Park Royal (West London), Brimsdown Industrial Estate (North London) and Maker Mile (Hackney, East London). These London firms contribute to a sector valued at £11 billion in 2023, an increase from £10.2 billion the year before.

In London alone, the Food & Drink sector, the city’s largest manufacturing subsector, generated £3.9 billion in 2023, illustrating the scale of enterprises driving the capital’s economy. The numbers may not suggest rapid expansion, but they underline that manufacturing continues to play a steady and important role in London’s economy.

Much of this work happens out of sight, but its impact is everywhere; manufacturing underpins the products and services that keep the city running, from everyday goods to high-growth sectors. For example, AI is one of the most significant emerging trends, and London’s manufacturing firms are starting to explore how it can transform production processes, alongside with technologies such as 3D printing and flexible manufacturing.

Food and drink producers supply restaurants, cafés, and local shops, with more 300 manufacturers in Park Royal and 130 manufacturers based in Hackney alone. Textiles and specialist makers provide costumes and set design for the West End, supported by hubs in Westminster, which is home to around 150 small manufacturing firms. Small engineers and craftspeople across the city also create products that feed into our High Street as well as hospitality, and healthcare. In short, manufacturing in London may not be highly visible, but it remains an essential part of how the city functions. Their work sustains London’s cultural and commercial life in ways that are often overlooked.

Across the UK, manufacturing accounts for over £220 billion of output and provides millions of jobs. Food & Drink is a major subsector in almost every region, supporting local supply chains and jobs. Beyond this, each area has its own specialisation: the North West is strong in Transport Equipment and Pharmaceuticals, the East Midlands in Metal Products and Transport Equipment, and Yorkshire & Humber in Metal Products, Chemicals, and textiles. Together, these regional clusters form the backbone of the UK’s industrial base. London may specialise in smaller, creative, and niche producers, but it is part of this larger national ecosystem that keeps supply chains moving and supports exports around the world.

Programmes such as Made Smarter UK, now extended to London with a £1.25 million scheme, are vital for supporting manufacturers across the capital and the UK. The programme has already supported over 3,000 businesses in other regions of the UK, contributing to more than 1,500 new jobs and generating over £300 million in projected GVA. We will be looking forward to see similar impact of job creation and growth in the capital.

They help SMEs adopt digital tools and new technologies, while providing access to mentoring, workshops, and peer networks. The programme also provides match-funded grants to trial new technologies and funded internships to support the integration of digital solutions. This support allows businesses to tackle challenges such as supply chain disruptions, skills gaps, and rapidly changing markets. In doing so, the programme strengthens local communities and reinforces the foundations of the UK’s industrial base.

While the sector may face some challenges compared to last year, it continues to play a crucial role in the economy. In London, the manufacturing sector accounts for 2.2 percent of total employment and a similar share of GVA, and investing in workforce development and apprenticeships will be key to sustaining this contribution. By equipping young Londoners with skills in engineering, design, and digital manufacturing, we can ensure that businesses have the talent needed to innovate and grow. At the same time, fostering collaboration between manufacturers, universities, and tech providers will help the sector remain resilient allowing  even the smallest firms to access tools and expertise that would otherwise be out of reach.

These clusters provide jobs and help keep local economies running, from supplying neighbourhood shops to supporting global industries. With the right support, manufacturing in London can adapt to future demands.

We must continue to invest in our makers. By nurturing talent, supporting innovation, and strengthening local supply chains, we can ensure that making and creating remain at the heart of London’s story and that the sector continues to shape the city’s future. The “Made in London” label is not just a mark of quality; it reflects the creativity and expertise that set the capital apart.

Read more:
Investing in Makers is investing in London’s Future 

Rick Stein’s famed restaurant and hospitality empire has plunged deeper into the red, warning that Rachel Reeves’s tax raid on employers is squeezing jobs and piling pressure on Cornwall’s largest private-sector businesses.

The TV chef’s group — which includes restaurants, hotels, shops, a cookery school and an e-commerce business — reported revenues of £18.9m at its flagship Seafood Restaurant (Padstow) last year, down £1.3m. Pre-tax losses widened to £459,000, more than double the previous year. Across the wider empire, sales fell 5.4% to £30.4m.

Directors said the outlook “remains challenging,” blaming Reeves’s decision to increase employer National Insurance contributions and cut the payment threshold. They warned that the “service-led nature” of hospitality meant the sector was being “severely impacted” by higher staffing costs, with nearly 90,000 hospitality jobs already lost nationwide since the October Budget.

The group employs 355 staff, making it one of Cornwall’s biggest private employers. In a recent interview Stein himself argued that the Chancellor’s strategy risked stifling spending: “Because the economy is not looking too good, people aren’t going out as much, so the one thing you don’t want to do is impose a heavy tax on the sorts of industries that are actually producing stuff.”

Despite adjusting menus and raising prices to offset soaring food, energy and commodity costs, Stein’s directors admitted falling customer numbers and the cost-of-living crisis continue to batter revenues.

Ian Fitzgerald, managing director at Seafood Restaurant (Padstow), urged Reeves to rethink her stance: “Hospitality is a people-first industry, and we are proud to employ so many talented professionals. The Chancellor needs to ease our financial pressures in the autumn Budget to prevent further job losses and support the recovery of the hospitality industry.”

Stein and his former wife Jill opened their first Padstow restaurant 50 years ago. Today the empire stretches across Cornwall, but its future depends on navigating an unforgiving mix of tax hikes, falling demand and rising costs.

Read more:
Cornwall icon Rick Stein hit by Reeves’s tax hike as hospitality jobs vanish

Motorists face the prospect of being charged for every mile they drive under radical plans to plug Britain’s black hole in public finances.

The Resolution Foundation — a think tank with close links to Labour — has urged Chancellor Rachel Reeves to overhaul motoring taxes, warning that fuel duty revenues are collapsing as drivers switch to electric vehicles.

Its proposal would see drivers hit with an annual levy plus a per-mile charge ranging from 3p to 9p, with heavier vehicles paying more to reflect the strain on Britain’s roads. The system could raise as much as £20bn a year, the report said, potentially covering two-thirds of the Chancellor’s looming £30bn fiscal gap.

Adam Corlett, the report’s author, said: “Motoring taxes are an important part of the tax system but they are also an obvious and significant fiscal risk.” He suggested miles could be logged via MOT checks, self-reporting or telematics, while also recommending cutting VAT on public charging points and reversing the long-standing freeze on fuel duty.

Fuel duty currently brings in around £28bn annually, but the Office for Budget Responsibility predicts this will fall to £22.6bn by 2030. Corlett said raising the levy by 3% a year and gradually reversing the 5p temporary cut could see the tax rise to nearly 70p per litre by the decade’s end.

Motoring groups immediately pushed back, warning that road pricing would unfairly hit drivers while raising concerns over privacy and tracking. Ian Taylor, from the Alliance of British Drivers, said: “It would almost certainly put prices up and probably the only way to administer it is to track everyone, which has freedom and privacy implications.”

The report comes as Reeves faces intense pressure ahead of her November Budget, with speculation she may need to raise up to £30bn in fresh taxes to meet her fiscal rules.

A Treasury spokesman declined to comment on the proposals, saying only: “The Chancellor makes tax policy decisions at fiscal events.”

Read more:
Reeves urged to slap drivers with pay-per-mile tax that could raise £20bn

Jeremy Hunt has accused Rachel Reeves of dragging Britain into “stagnation and decline” by raising taxes, warning that the Chancellor’s policies risk smothering the entrepreneurial drive the country needs.

Writing for Conservative Home, the former Chancellor said it was now “all but nailed on” that Reeves will raise taxes by £30bn in November’s Budget — pushing the overall increase in Britain’s tax burden to £70bn in just 13 months. He argued that while ministers focus on who the losers will be — pensioners, homeowners, savers — the greater danger lies in the long-term drag on economic growth.

Hunt pointed to OECD data showing that between 2010 and 2019, countries with lower public spending such as the US, South Korea and Australia grew on average 2% faster than high-spending nations such as Finland and Denmark. He argued that high taxation discourages investment, crowds out private capital and ultimately stifles “animal spirits” — the entrepreneurial energy John Maynard Keynes once said was essential for capitalism.

“Simply put, people work harder in countries with lower taxes,” Hunt said, citing data showing workers in lower-tax OECD economies put in 260 more hours a year than those in high-tax countries. He warned that Britain’s welfare system undermines incentives to work, with some claimants projected to earn more from benefits than full-time employees on the national living wage.

The Tory MP drew comparisons with the US, where Mississippi has pursued a decade of phased tax cuts. He claimed the policy had transformed the state into the fastest-growing in America, lifting wages and investment while reducing poverty. “The poorest state in America now has a higher output per head than we do,” he wrote.

Hunt, who raised taxes himself as Chancellor to steady markets after the Liz Truss crisis, said those hikes were only meant as a temporary necessity. He contrasted his approach — cutting national insurance and introducing “full expensing” for business investment — with Reeves’s decision to permanently increase borrowing and taxation.

“Countries with lower taxes tend to grow faster,” Hunt concluded. “I know which I’d prefer for the UK.”

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Jeremy Hunt warns Reeves: soaring taxes will kill UK’s ‘animal spirits’