Business

The UK is forecast to have the highest rate of inflation among the world’s richest economies this year, according to the Organisation for Economic Co-operation and Development (OECD).

In its latest outlook, the OECD raised its prediction for UK inflation to 3.5% across 2025, up from a previous estimate of 3.1%, citing rising food prices and higher business costs. Although the rate is expected to ease to 2.7% in 2026, it would still be the second highest in the G7.

At the same time, growth projections remain muted. The OECD has nudged up its forecast for UK GDP growth in 2025 to 1.4%, but expects the economy to slow to just 1% in 2026. The organisation warned this downturn would be driven by a “tighter fiscal stance” – pointing to likely tax rises or spending cuts – and ongoing trade frictions.

The figures come as Chancellor Rachel Reeves prepares her November Budget, in which she is under pressure to plug a potential £20bn-£30bn hole in the public finances while sticking to Labour’s self-imposed borrowing rules. Reeves said the OECD’s findings confirmed that “the British economy is stronger than forecast” but acknowledged “there is more to do to build an economy that works for working people”.

The Conservatives seized on the figures, with shadow chancellor Sir Mel Stride accusing Reeves of creating a “high tax, high inflation, low growth doom loop” and warning the UK was “teetering on the edge of stagflation”.

The OECD’s assessment also comes against a backdrop of stubbornly high domestic price pressures. UK inflation stood at 3.8% in August, driven by food costs and higher wage bills, and the Bank of England has warned it could climb to 4% before easing.

Globally, the OECD upgraded its forecast for growth this year to 3.2% from 2.9%, highlighting resilience in the US economy where investment in artificial intelligence has helped offset the drag from higher tariffs imposed by President Donald Trump.

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OECD forecasts UK to have highest inflation in G7 in 2025

Thousands of British technology workers face soaring costs after Donald Trump confirmed plans to impose a $100,000 (£74,000) fee on specialist US visas.

The dramatic increase applies to the H-1B visa, which is widely used by tech companies to hire foreign workers. Last year, 1,462 Britons received H-1B visas – more than any other European nation – while 985 have already been approved in the current fiscal year.

Trump’s administration said the measure is intended to encourage companies to recruit American workers. Commerce Secretary Howard Lutnick initially announced that the $100,000 fee would be levied annually, including at renewal, but the White House later clarified it would be a one-off charge when the visa is first granted.

The move has sparked a backlash in Silicon Valley, where companies such as Amazon, Microsoft and Google argue that H-1B visas are essential to attract top talent amid fierce competition with China in fields such as artificial intelligence. Elon Musk, the Tesla chief executive, claimed he and many of his colleagues were only in the US thanks to the visa system and pledged to “go to war” over the issue if necessary.

Economists warned the change would damage US growth by restricting access to skilled foreign workers. Atakan Bakiskan of Berenberg said: “By making it very expensive for companies to attract foreign talent and by forcing some international students to leave the country after graduation, the brain drain will weigh heavily on productivity.”

The impact could present an opportunity for Britain. Dom Hallas of the Startup Coalition urged Home Secretary Shabana Mahmood to expand the UK’s Global Talent visa and reform share award tax rules, arguing the country could position itself as the “destination of choice” for international tech workers.

Sir Keir Starmer is already exploring measures to attract top scientists, software developers and academics, with officials examining proposals to scrap visa fees entirely for leading professionals. One senior figure described the current system as a “bureaucratic nightmare”, while sources said Trump’s crackdown had given “wind in the sails” to Britain’s own plans.

The Prime Minister’s global talent taskforce, led by business adviser Varun Chandra and science minister Lord Vallance, is reviewing proposals ahead of the November Budget. Previous attempts to attract elite talent have had limited success, but Labour sees a chance to capitalise on Trump’s hardline stance.

India remains by far the largest source of H-1B visa holders, followed by China and Brazil. Britain is ninth on the list, but the sharp increase in fees could now price out many skilled workers who previously sought to live and work in the US.

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Thousands of Britons to be hit by Trump’s $100,000 visa fee

Boohoo has warned suppliers that payments could be delayed as the fast-fashion group grapples with growing financial pressures.

The retailer, which also trades as Debenhams, wrote to some suppliers saying it was “running behind on payments” and asked how much stock they could deliver in September without receiving further payment, according to an email seen by Business Matters.

The warning comes just months after Business Matters revealed customers were waiting up to a month for refunds. Boohoo admitted at the time that refunds were taking longer to process than usual, without explaining the cause of the delays.

Last month the group secured a £175m borrowing facility, designed to stabilise its finances. However, Mike Ashley’s Frasers Group, Boohoo’s largest shareholder, criticised the deal, claiming the high interest rate of 7.3 percentage points above the Bank of England base rate meant cash was being “sucked out” of the business.

The company’s financial difficulties have intensified after annual losses nearly doubled to £348m, while sales dropped almost 20% to £790m. The group’s net assets have also collapsed to £3.9m, down from £280m a year earlier. Analysts at Shore Capital recently described Boohoo as “very constrained” amid the squeeze.

Relations between Boohoo and its suppliers have long been fraught. In 2020, the company faced criticism over poor working conditions at some factories. More recently, suppliers have accused the group of pushing down prices and withholding payments over quality disputes. Boohoo has denied wrongdoing but admitted it has sought price reductions in the past when inflationary pressures eased.

Asked to comment on the latest email, Boohoo said: “A junior colleague, in one of our smaller brands, emailed a small number of suppliers to work on capacity planning.”

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Boohoo warns suppliers of late payments as cash crisis deepens

Amazon is shutting down all 19 of its Amazon Fresh grocery stores in the UK, putting around 250 jobs at risk as the company pivots towards online sales and expands its Whole Foods brand.

The US retail giant confirmed it has launched a consultation process with employees, warning that while some staff may be redeployed elsewhere in the business, many roles are likely to be affected.

Amazon Fresh first launched in 2021 with its “just walk out” technology, which allowed shoppers to leave stores without visiting a till. Customers used an app to enter and were automatically billed for items taken, tracked by cameras and sensors. Despite initial fanfare, growth ambitions slowed as demand waned after the pandemic.

Of the 19 stores, five are earmarked for conversion into Whole Foods outlets, bringing the organic-focused chain to 12 sites nationwide by the end of next year. Two additional Whole Foods locations are also planned.

Amazon UK country manager John Boumphrey insisted the company remains “deeply invested” in British grocery retail, he added: “Since 2008, we’ve worked hard to innovate to help our customers save time and money when shopping for groceries and household essentials,” he said. “We continue to invent and invest to bring more choice and convenience to UK customers, enabling them to shop for a wide range of everyday essentials and groceries with low prices and fast delivery through Amazon.co.uk, Amazon Fresh, and Whole Foods Market stores, alongside our third-party grocery partners, including Morrisons, Co-op, Iceland, and Gopuff.”

As part of the overhaul, Amazon plans to double the number of Prime members with access to at least three of its grocery options. It will also launch fresh groceries, including dairy, meat and seafood, on Amazon.co.uk from next year.

The closures mark the latest retrenchment by Amazon in physical retail, following previous cutbacks in the US.

Where are the 19 UK Amazon Fresh stores?

Aldgate
Angel
Chingford
East Croydon
Euston
Holborn
Hounslow
Hoxton
Kensington
Liverpool Street
Moorgate
Monument
Notting Hill Gate
Southwark
Sevenoaks
Wembley
West Hampstead
White City
Wood Wharf

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Amazon Fresh to close all 19 UK stores with up to 250 jobs at risk

Tyl by NatWest has announced a new strategic partnership with akru, the cloud-based point-of-sale (POS) platform powered by Zonal, to deliver a fully integrated payments and POS solution for UK hospitality venues.

Under the agreement, Tyl by NatWest becomes the preferred payments partner for akru, combining its secure, reliable payment processing with akru’s smart POS technology. The move is designed to give independent restaurants, cafés, bars, pubs and small hospitality chains a seamless end-to-end system for managing both transactions and operations.

The integrated platform will allow venues to sync payments directly with their POS system, reducing errors and improving security, while also streamlining sales, inventory management and real-time business reporting.

James Hodgson, CEO at Tyl by NatWest, said the partnership reflected the company’s commitment to supporting small businesses: “We’re thrilled to become the preferred payments partner for akru and to bring together our technology in one holistic solution for hospitality venues. This partnership directly supports our commitment to provide small businesses with reliable, easy-to-use payment tools that empower them to offer an outstanding customer experience.”

Steve Roberts, Managing Director at akru, added: “By integrating secure, efficient payments into our cloud POS, we’re able to offer hospitality businesses across the UK an end-to-end solution that’s simple to use, but powerful enough to support their growth and ambition.”

The partnership allows Tyl by NatWest to expand its footprint in the hospitality sector, while enabling akru to strengthen its platform with a major payments partner. Both companies said the collaboration would equip UK hospitality businesses with technology that is easy to adopt yet rich in functionality, helping venues to improve efficiency and deliver better customer experiences.

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Tyl by NatWest partners with akru to launch integrated POS and payments solution for UK hospitality

Rachel Reeves is under pressure to overhaul the UK’s tax system after the Resolution Foundation urged her to cut employee national insurance contributions by 2p and offset it with an equivalent rise in income tax.

The thinktank, which has close ties to senior Labour ministers, said the measure could raise an additional £6bn a year by spreading the tax burden across a wider pool of taxpayers, including pensioners, landlords and the self-employed. Employee national insurance is not paid by these groups, unlike income tax.

Publishing proposals for up to £30bn in extra revenue, the foundation argued that the “2p switch” would help “level the playing field” while keeping working-age employees’ take-home pay unchanged. The plan mirrors the argument made by former Conservative chancellor Jeremy Hunt, who described national insurance as an “unfair double tax on work” when he cut contributions by 4p last year.

However, the recommendation puts Reeves in a politically difficult position. While the shift would leave net employee taxes unchanged, it would technically amount to raising income tax – something Labour promised not to do during the election campaign.

The intervention comes as the chancellor prepares her 26 November autumn budget against a backdrop of faltering growth, soaring borrowing costs and an expected productivity downgrade from the Office for Budget Responsibility. Economists believe Reeves faces a fiscal gap of as much as £40bn, leaving her under pressure to raise taxes on companies, landlords and wealthier households.

The Resolution Foundation said Reeves should use the budget to rebalance the £1tn tax system, reducing the bias against employees and raising more from those with greater wealth. Alongside the NI switch, it suggested reforms such as extending employer national insurance to partnerships, tightening corporation tax compliance, and introducing levies on sugar, salt and carbon-intensive travel.

Adam Corlett, principal economist at the thinktank, said: “These sensible reforms would raise revenue while doing the least possible harm to workers and the wider economy. And by acting decisively, the chancellor can turn her full attention back on to securing stronger economic growth.”

A Treasury spokesperson said: “The chancellor makes tax policy decisions at fiscal events. We do not comment on speculation around future changes to tax policy.”

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Rachel Reeves urged to shift 2p from NI to income tax in autumn budget

Nvidia is set to invest up to $100bn in OpenAI and supply the ChatGPT-maker with advanced data centre chips, in one of the most significant partnerships yet in the global race to dominate artificial intelligence.

The deal, announced Monday, will be structured as two interlinked transactions. OpenAI will pay Nvidia in cash for chips, while Nvidia will take non-controlling shares in the AI start-up, according to a person close to the company. Shipments of the chipmaker’s hardware are due to begin as early as late 2026.

The first tranche of the investment, worth $10bn, will be triggered when OpenAI signs a definitive agreement to purchase Nvidia chips. Nvidia, already the world’s most valuable company with a $4tn market capitalisation, had previously injected $6.6bn into OpenAI. The San Francisco-based start-up remains tied to Microsoft, which secured 49% of its profits after a $13bn investment in 2023.

Both companies signed a letter of intent to deploy at least 10GW of Nvidia’s chips to power OpenAI’s infrastructure, underscoring the vast scale of their ambitions.

“Everything starts with compute,” said OpenAI chief executive Sam Altman. “Compute infrastructure will be the basis for the economy of the future, and we will utilize what we’re building with Nvidia to both create new AI breakthroughs and empower people and businesses with them at scale.”

Altman has long argued that the pace of OpenAI’s innovation is constrained by limited access to computing power, particularly GPUs, which underpin the ability of AI products to respond to user queries in real time.

The companies said they expect to finalise the partnership details in the coming weeks, with the first deployment phase planned for the second half of 2026.

Nvidia’s move comes just days after it pledged $5bn to struggling chipmaker Intel, part of a wider strategy to extend its dominance in AI hardware while backing some of the world’s most high-profile players in the sector.

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Nvidia to invest $100bn in OpenAI, cementing landmark AI partnership

Manchester United’s sweeping job cuts have cost more than £36 million in compensation, but helped slash losses and deliver record revenues, casting doubt on Sir Jim Ratcliffe’s claim that the club was on the brink of financial collapse.

The restructuring, which saw around 400 jobs axed and included pay-offs for sacked manager Erik ten Hag and sporting director Dan Ashworth, reduced net losses to £33m in the 12 months to June 30 — down from £113.2m the year before. The headcount has fallen from 1,122 to around 700.

The overhaul came after a disastrous season on the pitch, which brought United’s lowest league finish in 51 years and no Champions League football. Broadcast revenues dropped by almost £50m. Yet commercial income soared 10% to a record high, boosted by the lucrative Snapdragon shirt sponsorship and a new e-commerce partnership with SCAYLE. Matchday takings also jumped nearly 17%, while wages fell £51.5m to £313.2m after players took a 25% cut in the absence of Champions League bonuses.

Despite the turbulence, United posted revenues of £666.5m — the biggest in their history. Analysts say this undercuts Ratcliffe’s dramatic warning earlier this year that the club could go “bust by Christmas 2025”.

Although the balance sheet remains stretched by ongoing transfer spending and another season outside the Champions League, United’s ability to generate cash is formidable. The club’s EBITDA — earnings before interest, taxes, depreciation and amortisation — reached £182.8m and is forecast to remain between £180m and £200m this season, the highest of any European club since the pandemic.

For investors and lenders, EBITDA is a key gauge of financial strength. By that measure, United’s performance suggests resilience, not impending ruin. While Ratcliffe’s cuts have been painful, the club’s cash-generating power continues to set it apart in European football, even in difficult times.

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Sir Jim Ratcliffe’s ‘bust by Christmas’ warning questioned after £36m jobs cull at Manchester United

The cost of running the UK’s gambling regulator has doubled in the past year as it prepares for a high-stakes legal showdown over the awarding of the National Lottery licence.

Newly filed accounts show that the Gambling Commission’s costs linked to the National Lottery soared to £28.8m in the year to March, up from £14.4m the year before. The surge reflects mounting legal fees as the regulator prepares to defend itself against a £1.3bn damages claim from publishing tycoon Richard Desmond.

Desmond, 73, is suing the Commission after his company failed in its bid to win the lucrative 10-year licence, which was awarded instead to Allwyn, owned by Czech billionaire Karel Komárek. The case is scheduled to begin at the High Court in October.

The Commission’s work is partly funded through the National Lottery Distribution Fund (NLDF), which channels money raised by ticket sales to good causes. However, as the regulator’s litigation costs spiral — up to £13.4m last year from £400,000 previously — critics warn that funds meant for charities and community projects are being drained into the courtroom.

Desmond has also filed a separate £70m claim arguing that funds set aside for good causes under the previous operator, Camelot, constituted a “subsidy” that should now be clawed back from Allwyn. Should either claim succeed, damages are also likely to be drawn from the NLDF.

The Gambling Commission insisted it had run a “fair and robust” competition and said its evaluation process was lawful. Allwyn, meanwhile, has faced difficulties since taking over the lottery early last year. A major IT system upgrade, deemed critical to its promise to more than double charitable donations to £38bn, was beset by delays, prompting enforcement action by the regulator.

Despite the turbulence, National Lottery sales rose last year thanks to record EuroMillions jackpots, including a €250m (£217m) prize in March. That helped offset declines in Lotto and scratchcard sales during the cost of living crisis. Overall, money raised for good causes rose by £100m to £1.8bn.

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Gambling Commission costs double to £28.8m amid Richard Desmond’s £1.3bn Lottery lawsuit

As social media continues to weave itself into the fabric of daily life, the algorithms that drive engagement have come under fire for their potential to foster addictive behaviours.

With research linking these algorithms to increased anxiety and feelings of inadequacy, the question arises: should we regulate their use? The Liberal Democrats are now calling for cigarette-style warnings on social media apps.

This conversation is not only vital for user well-being but also presents an opportunity for businesses to adopt responsible marketing practices that prioritise mental health. Mariangela Caineri Zenati, Marketing Manager at social media management platform Loomly, offers her expert insight on how championing transparency and promoting positive content will allow brands to engage their audiences ethically while navigating the complexities of the digital landscape.

“The debate surrounding the legality of addictive algorithms in social media has gained significant traction in recent years, particularly in light of their profound implications for mental health and overall well-being. As social media platforms increasingly rely on sophisticated algorithms to maximise user engagement, the potential for addictive behaviours has come under scrutiny.

“Research highlights that these algorithms can create dependency-like behaviours, reminiscent of substance addiction. A recent study revealed that the instant gratification derived from likes, shares and comments can trigger dopamine release, reinforcing compulsive behaviours among users. This is particularly alarming for younger demographics, who are often more susceptible to these influences.

“The Royal Society for Public Health’s #StatusofMind report underscores this concern, identifying platforms such as Instagram and Snapchat as being linked to increased feelings of inadequacy, anxiety, and loneliness among young users. This report indicates that these platforms rank as the most detrimental for mental health, highlighting the urgent need for more responsible practices.

“The pervasive nature of these algorithms can contribute to rising rates of anxiety and depression among users. The #StatusofMind report also calls for social media companies to implement educational warnings and promote healthier online interactions: this raises important questions about the ethical responsibilities of businesses that utilise social media marketing strategies.

“As businesses increasingly turn to social media for marketing, they have a unique opportunity to approach these platforms responsibly. Companies can prioritise user well-being by promoting positive content, fostering supportive online communities and ensuring transparency in their advertising practices; for instance, brands can engage in campaigns that encourage mental health awareness and provide resources for users facing challenges. This way, brands can align themselves with ethical marketing practices while simultaneously building trust and loyalty among their audience.

“Responsible social media marketing involves understanding the impact of algorithms on user behaviour. Businesses should be mindful of how their content may influence users and strive to create a balanced digital experience; this could involve diversifying content types, avoiding sensationalism and steering clear of tactics that exploit users’ vulnerabilities for engagement.

“The potential for addiction necessitates a critical examination of the legal and ethical frameworks surrounding social media algorithms. Businesses must play a proactive role in promoting responsible marketing practices, which can help mitigate the negative effects of these algorithms while enhancing user experience. Addressing these issues is vital for creating a more positive online landscape, ultimately benefitting both users and brands alike.”

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Beyond Engagement: Why It’s Time to Rethink Social Media’s Addictive Algorithms