Business

Octopus Energy has been named Britain’s Most Admired Company 2025, becoming the youngest business ever to win the prestigious accolade.

The UK’s largest energy supplier took the top prize at a ceremony held at the London Stock Exchange, beating long-established corporate heavyweights that in some cases have been operating for more than a century.

In addition to the overall title, Octopus collected six gold sector awards and two silver sector awards, underlining the scale of its reputation across British business.

Founder and chief executive Greg Jackson said the recognition carried particular weight because it was awarded by peers and competitors across the business community.

“Business leaders use the word ‘humbled’ all the time, but this really is the case today,” Jackson said.
“To be Britain’s Most Admired Company, voted for by other businesses including our competitors, feels like a real achievement.

“It’s the result of incredible focus and dedication from 12,000 people working together, outstanding long-term investors, and the British public not just demanding something better — but choosing it.”

Britain’s Most Admired Companies is now in its 35th year, making it the UK’s longest-running annual survey of corporate reputation. The rankings are run by Echo Research in partnership with the London Stock Exchange and assess more than 250 of Britain’s largest companies across 28 industry sectors.

Companies are judged against 13 reputational criteria, with more than 350 interviews conducted with board-level executives, analysts and City commentators between July and October 2025, meaning rival businesses have a direct say in the results.

Octopus Energy was the only private company to feature in the top ten overall rankings. It secured the top spot ahead of Airbus in second place, Marks & Spencer in third, and Rolls-Royce in fourth. Rolls-Royce chief executive Tufan Erginbilgiç was named Britain’s Most Admired Leader.

Octopus won the gold sector award for Energy Distribution and Supply for the third consecutive year. It also claimed gold awards for Clarity in Strategy, Effective Use of Corporate Assets, Positive Contribution to Society and Reducing Environmental Impact. The company shared gold in Quality of Management and picked up silver awards for Ability to Attract, Develop and Retain Talent and Capacity to Innovate.

Dame Julia Hoggett, chief executive of the London Stock Exchange, said Octopus’s success reflected more than just strong financial performance.

“Octopus Energy is recognised not only for strategic clarity and operational excellence, but for visible leadership in the energy transition, where national resilience, affordability and ambition converge,” she said. “It is a powerful illustration of purpose translated into performance, and performance into trust.”

Sandra Macleod, group chief executive of Echo Research, added: “Octopus Energy’s recognition reflects a blend of strategic clarity, decisive leadership and visible societal and environmental contribution. They are being rated not only as the most admired company in their sector, but as the most admired in Britain, a rare signal of trust from peers, analysts and City commentators.”

Read more:
Octopus Energy crowned Britain’s Most Admired Company

A pair of former Dyson engineers have raised millions of pounds to bring a battery-powered electric boiler to market, positioning it as a lower-cost, lower-disruption alternative to heat pumps for millions of UK homes.

Wiltshire-based Luthmore was founded in 2022 by Craig Wilkinson and Martin Gutkowski, both ex-Dyson engineers who previously worked together on projects including the vacuum maker’s abandoned electric car programme. Their ambition is to replace gas combi boilers in small and medium-sized homes with an all-electric system that fits into the same space and delivers comparable performance.

The start-up has now raised £12.4m in total funding, including a recently closed and heavily oversubscribed £5.5m round. Backers include housing developers, residential management companies, plumbing groups and high-net-worth individuals, alongside a £1m investment from the British Business Bank via the South West Investment Fund, delivered by The FSE Group.

As part of its next growth phase, Luthmore has also appointed Hervé Dehareng, a former senior innovation director at Dyson, as chief executive. Dehareng led global launches of flagship Dyson products including the hand dryer and bladeless fan, and has previously held senior roles at Accenture.

“I want to make the Luthmore boiler the electric vehicle equivalent for home heating within three years,” Dehareng said.

Unlike heat pumps, which often require significant insulation upgrades, larger radiators and outdoor units, Luthmore’s boiler is designed as a near drop-in replacement for a gas combi. The unit is the same size as a standard boiler and uses lithium iron phosphate (LFP) batteries to store electricity when it is cheaper — such as overnight or from solar panels — and release it at higher power during peak demand.

The system delivers hot water at up to 30kW and central heating at 10kW, without the need for a hot water tank or radiator replacements. According to Wilkinson, this makes it suitable for flats and terraced homes where space constraints or upfront costs make heat pumps impractical.

“There’s a substantial number of homes where a heat pump is not going to be appropriate,” he said. “Our boiler can fit in the same space as a gas combi and give similar performance, without the upheaval.”

The company estimates its target market at five to six million UK homes, particularly smaller properties transitioning away from gas.

While Luthmore’s boiler undercuts heat pumps on upfront cost — expected to retail at around £4,500 compared with £13,000 for a typical heat pump installation — its founders are candid about the challenge posed by Britain’s energy pricing.

Electricity remains significantly more expensive than gas under Ofgem’s price cap, meaning the running costs are higher. Luthmore estimates annual heating and hot water costs of around £667 for a typical two-bedroom flat, compared with £444 for a gas boiler and £556 for a heat pump.

“That’s the reality of the UK energy system right now,” Wilkinson said, adding that levies and network charges placed disproportionately on electricity risk undermining the transition to electrified heating.

The funding round and leadership appointment come as the government prepares to publish its long-awaited Warm Homes Plan and implement the Future Homes Standard in 2026, both of which are expected to accelerate the shift away from fossil-fuel heating.

Gas boilers have already been banned in new homes, and while Energy Secretary Ed Miliband has stepped back from an outright ban on gas boiler replacements by 2035, ministers remain under pressure to expand low-carbon heating options.

At present, only heat pumps qualify for grants of up to £7,500 under the Boiler Upgrade Scheme, though officials have said they are still exploring the role of alternative electrified systems.

For investors, Luthmore’s pitch is about pragmatism rather than purity. “With regulatory tailwinds, a strong patent portfolio and early traction with developers and installers, we see a compelling pathway for Luthmore to help households cut emissions,” said Ralph Singleton of The FSE Group.

Whether battery-powered boilers can scale fast enough — and overcome the electricity-gas price gap — remains an open question. But with more than £12m raised and a growing policy push to decarbonise homes, Luthmore is betting there is room in the market for an electric option that sits somewhere between gas boilers and heat pumps.

Read more:
Ex-Dyson engineers plot electric boiler to rival heat pumps — but admit high energy costs remain a hurdle

Sir Keir Starmer is preparing to back legislation that would ban under-16s from social media platforms, signalling a decisive shift in the government’s approach to online child protection.

The Prime Minister, who had previously voiced doubts about adopting Australia-style age restrictions, has now dropped his opposition and confirmed that all options are being considered, including a mandatory ban for under-16s.

Speaking on Thursday, Starmer said the government needed to “better protect children from social media”, adding that ministers were closely examining the Australian model and were open to further protections, including age-based restrictions.

Downing Street has also indicated it would not block a forthcoming Conservative amendment to the Children’s Wellbeing and Schools Bill, due to be voted on next week, which would introduce a legal requirement for social media companies to bar under-16s from their platforms.

One policy adviser close to No 10 said the issue had become “live” at the highest levels of government, noting that a large majority of MPs would likely support a ban if it came to a free vote, and that public backing for tougher action was growing.

The political momentum has been building rapidly. Conservative leader Kemi Badenoch said last weekend that her party would introduce a ban on under-16s using social media if it returned to power, while Greater Manchester mayor Andy Burnham has also voiced support for tighter restrictions.

Health Secretary Wes Streeting has backed intervention, warning that social media had been “unleashed without properly understanding the consequences” for children and teenagers.

The move would bring the UK closer to Australia, where Prime Minister Anthony Albanese introduced world-first legislation last year banning under-16s from platforms including Facebook, Instagram, TikTok, Snapchat and X. Under the Australian system, social media companies face fines of up to A$49.5 million (£25 million) if they fail to take “reasonable steps” to prevent underage access, using tools such as age verification, facial recognition or behavioural age inference.

In the UK, campaign group Smartphone Free Childhood says it has delivered more than 100,000 letters to MPs urging them to support a ban.

The government’s changing stance is also reflected in recent appointments. Josh MacAlister, a long-standing supporter of phone bans in schools, was promoted to children’s minister, while Gregor Poynton, who has expressed support for Australian-style restrictions, was appointed assistant chief whip. Technology Secretary Liz Kendall is also regarded within Westminster as more interventionist on online safety than her predecessor.

Supporters argue that a ban could reduce harms ranging from mental health issues to online radicalisation. Jonathan Hall KC, the government’s independent reviewer of terrorism legislation, has said age restrictions could help prevent a new generation of teenagers from being drawn into extremist content online.

However, the proposal remains controversial. Charities including the NSPCC and the Molly Rose Foundation have warned that a blanket ban could push children towards less regulated platforms or drive harmful behaviour underground.

Andy Burrows, chief executive of the Molly Rose Foundation, said such a move risked “causing more harm than good” unless accompanied by robust regulation of platform design and content.

Starmer himself had previously expressed personal reservations, saying late last year that controlling harmful content might be more effective than outright bans. But with cross-party pressure mounting and public opinion shifting, the Prime Minister now appears willing to move decisively.

If the amendment passes the House of Lords next week, it will go before MPs in the Commons, setting the stage for what would be one of the most significant interventions in the UK’s digital economy and tech regulation to date.

Read more:
Starmer poised to ban under-16s from social media as government hardens stance on child safety online

Britain’s heavy reliance on China for net zero technologies such as batteries could put as many as 90,000 manufacturing jobs at risk in the event of a major supply chain shock, according to a new report.

Analysis by the Institute for Public Policy Research (IPPR) warns that a severe disruption to battery component supplies, lasting as little as a year, could cripple the UK’s automotive industry, sharply reducing electric vehicle production and threatening factory jobs across the country.

The report models a scenario in which geopolitical conflict, such as a crisis over Taiwan, or a natural disaster disrupts Chinese battery manufacturing and processing. In that event, UK battery and car production could fall by nearly half, with widespread knock-on effects across supply chains.

Researchers estimate that around 67,000 jobs in EV manufacturing, 8,000 in battery production and almost 15,000 roles across the wider battery supply chain would be placed at risk, taking the total to roughly 90,000 jobs.

The IPPR argues that China’s dominance of battery materials and components gives Chinese electric vehicle manufacturers a built-in advantage over UK and European rivals, particularly during periods of disruption.

China is the world’s largest producer of batteries and battery inputs, including refined lithium, cathodes and anodes. Even where the UK sources battery cells from Europe or Japan, the report notes that many of those manufacturers themselves rely on Chinese raw materials, leaving Britain indirectly exposed.

By 2030, the IPPR estimates that 47% of UK battery cell demand will still be met through imports. For cathodes, that figure rises to 80%, while anodes are expected to be entirely imported. In the event of a supply interruption, battery output could fall by 50%, resulting in around 583,000 fewer electric vehicles being built in a single year.

Pranesh Narayanan, research director at the IPPR, said the UK’s exposure reflects the growing fragility of global trade.

“The UK is a small open trading nation sailing through an international economy whose waters are getting choppier by the day,” he said. “Trade wars, geopolitical conflict and global shocks ultimately hurt the UK because we rely so heavily on overseas supply chains for essentials, including clean energy technologies.”

To reduce the risk, the IPPR is urging ministers to accelerate domestic production of key battery components and critical minerals, while also diversifying international supply chains away from overdependence on any single country.

The report suggests encouraging joint ventures between UK firms and Asian manufacturers, alongside targeted industrial support to build resilience into the supply chain.

Laura Chappell, a researcher at the IPPR, said that economic resilience should become a core objective of British foreign and industrial policy.

“Diplomats should be working to build partnerships that underpin Britain’s future energy security,” she said. “These can be win-wins, supporting jobs and growth both in the UK and in partner countries.”

The findings are likely to sharpen debate in Whitehall over the national security implications of the net zero transition. A separate report last year by the Royal United Services Institute warned that excessive reliance on China for clean energy technologies posed strategic risks.

Energy Secretary Ed Miliband has faced criticism from Conservatives, who argue that his push for a fully decarbonised electricity system by 2030 risks “binding Britain to Beijing” through increased use of Chinese solar panels and batteries.

The government has previously rejected that characterisation, insisting it will “never compromise national security” and arguing that the greater long-term risk lies in continued reliance on volatile fossil fuel markets dominated by authoritarian states.

However, the IPPR report adds fresh urgency to calls for a more muscular industrial strategy, warning that without decisive action, Britain’s net zero ambitions could leave key sectors of its manufacturing base dangerously exposed.

Read more:
Net zero reliance on China ‘puts 90,000 UK jobs at risk’, think tank warns

The government is to roll out a new £1bn-a-year support scheme designed to give people on low incomes direct access to emergency cash when they face sudden financial shocks.

The Crisis and Resilience Fund, which launches in April, will run for an initial three years and replace the temporary Household Support Fund that has been extended repeatedly since its introduction during the pandemic in 2021.

Under the new scheme, individuals will be able to apply for emergency payments through their local council, regardless of whether they are in receipt of benefits. Councils will be able to award cash support in cases such as a sudden loss of income, redundancy, an unexpected bill like a broken boiler, or where early intervention could prevent someone from falling into deeper financial crisis.

The fund represents a shift in how crisis support is delivered. Unlike previous schemes that relied heavily on vouchers, food parcels or referrals to food banks, councils will now be explicitly encouraged to provide cash payments. Ministers hope this will help meet a manifesto pledge to reduce what they describe as “mass reliance on emergency food parcels” by giving households greater flexibility and dignity in how support is used.

The Department for Work and Pensions has set out guidance allowing councils to use the funding in three broad areas: immediate crisis payments, housing-related support where there is a sudden shortfall, and longer-term resilience services, including funding for charities and local organisations that provide frontline assistance.

Although the overall level of funding broadly matches the previous Household Support Fund, some councils have expressed concern that it will not be enough to meet rising demand. A recent survey by the Local Government Association found most councils in England do not believe current funding levels are sufficient to cover local welfare needs, particularly as cost-of-living pressures persist.

However, the commitment to provide guaranteed funding for at least three years has been welcomed by local authorities and charities, as it allows councils to plan their support programmes more effectively rather than relying on short-term extensions.

Emma Revie, co-chief executive of Trussell Trust, said the new fund marked an important step forward. She said it could help ensure fewer people are forced to rely on food banks simply to get by.

Children’s charity Barnardo’s also welcomed the move towards cash-first support. It said enabling councils to provide direct payments, rather than vouchers or parcels, would give families greater agency and choice at times of crisis.

Some councils are already using similar approaches, distributing funds via Post Office cash vouchers or digital “pay-by-text” systems that allow people to withdraw money from cash machines quickly.

The new guidance gives councils flexibility in how they divide funding between crisis payments, housing support and resilience services, but they will be required to publish how the money will be used and open applications to the public by 1 April.

Equivalent funding will be allocated to Scotland, Wales and Northern Ireland, with devolved administrations free to decide how the money is spent in their own areas.

Minister for Employment Dame Diana Johnson said the fund would give councils the certainty they need to intervene early and prevent families from being pushed into crisis. She said the aim was to provide fast, practical help at the point people need it most.

Read more:
Government to give cash payouts to people in financial crisis

Soho House has secured fresh financing to complete its $1.8 billion take-private deal, stabilising a transaction that had been thrown into doubt just weeks ago.

The London-based private members’ club group said it has now locked in alternative funding to replace a $200 million shortfall, clearing the way for a consortium led by MCR Hotels to complete the acquisition.

In a regulatory filing, Soho House confirmed that Morse Ventures, owned by Tyler Morse, chief executive of MCR Hotels, will provide a $50 million equity commitment. MCR itself will also contribute a further $50 million in equity under its original agreement.

The remaining funding has been secured through changes to the group’s debt structure and shareholder arrangements. Soho House has amended its financing package with Apollo and Goldman Sachs, increasing its senior unsecured notes facility to $220 million from $150 million. As part of the restructuring, Apollo’s equity commitment has been reduced from $50 million to $30 million.

The final $50 million gap was bridged after major shareholders agreed to roll over their equity rather than take cash, reducing the total funding required to complete the deal.

The revised structure follows a turbulent period for the company. Earlier this month, Ron Burkle’s investment firm Yucaipa disclosed that MCR, previously a cornerstone backer, would not be able to deliver its full equity commitment by the expected closing date. That announcement sent Soho House shares tumbling by almost 10 per cent and raised questions over whether the transaction would collapse.

The takeover was agreed in August, when a group of investors led by MCR Hotels offered $9 per share to take Soho House private, valuing the business at $1.8 billion. The consortium agreed to acquire the shares not already held by four major shareholders, who chose to roll over their existing stakes.

Those rolling over include Nick Jones, who owns around 6 per cent of the business, restaurateur Richard Caring, and Goldman Sachs Alternatives, which is also committing additional capital. Actor-turned-investor Ashton Kutcher is also part of the investor group.

Founded 30 years ago, Soho House has expanded to 46 clubs worldwide but has struggled as a listed business since floating in New York in 2021 at $14 a share. The stock has fallen close to 30 per cent over five years, reflecting tougher economic conditions and investor concerns that the brand’s once-distinctive sense of exclusivity had begun to erode.

With funding now secured, the company said it intends to proceed to completion, marking the end of a volatile chapter as a public company and a return to private ownership.

Read more:
Soho House secures funding to complete $1.8bn takeover deal

The BBC is close to agreeing a landmark partnership with YouTube, signalling a significant strategic shift as the public broadcaster looks to reach younger audiences on the platforms they increasingly favour.

Under the proposed arrangement, the BBC would create original, bespoke programmes designed specifically for YouTube, with the option for successful formats to later migrate to its own platforms, including BBC iPlayer and BBC Sounds. The move is intended to ensure the corporation remains relevant to future generations of licence fee payers as viewing habits continue to fragment away from traditional television.

The plans were first reported by the Financial Times and subsequently confirmed to industry title Deadline by a source briefed on the discussions. An announcement could come as early as next week. The BBC declined to comment.

While the BBC has maintained a strong presence on YouTube for more than two decades, it has never previously commissioned content exclusively for the platform. Its main YouTube channel, which has more than 15 million subscribers and almost 12 billion views, largely hosts trailers and clips from existing programmes such as The Traitors. BBC News has been active on YouTube since 2006 and regularly publishes longer-form video content, attracting an audience of around 19 million subscribers.

Details of how any original YouTube programming would be funded remain unclear. The BBC does not carry advertising in the UK, but the Financial Times reported that the broadcaster could monetise YouTube-only content internationally, creating an additional commercial revenue stream to supplement the licence fee.

The move would follow similar experimentation elsewhere in the sector. Channel 4 has already commissioned original documentaries and digital drama specifically for YouTube, using the platform as a testing ground for new formats and audiences.

However, the proposal is not without internal scepticism. Some within the BBC question whether YouTube originals can ever deliver a meaningful financial return, suggesting the primary motivation is audience reach rather than revenue generation.

The timing is notable. Earlier this week, Deadline revealed that YouTube had overtaken the BBC on one key audience reach metric for the first time. According to figures from ratings body BARB, YouTube reached 51.9 million UK viewers in December, compared with the BBC’s 50.8 million. While the BBC remains ahead on other measures, the milestone underlines the scale of YouTube’s challenge to traditional broadcasters.

The potential deal also lands amid growing political scrutiny of YouTube’s influence. In a keynote speech at the Royal Television Society’s Cambridge Convention last autumn, culture secretary Lisa Nandy warned that the government was prepared to intervene to ensure public service content is given prominence on the platform. YouTube has previously argued that such regulation would be premature while discussions with broadcasters are ongoing.

Juliane Althoff, partner and film and TV lawyer at Simkins LLP, said the move reflects a pragmatic recognition of changing audience behaviour. “This deal marks a strategic acknowledgement of where audiences now sit and how they consume content, particularly younger demographics, while also opening up new commercial opportunities to supplement the licence fee,” she said.

She added that any agreement would need to be carefully structured to protect the BBC’s editorial standards and long-term intellectual property. “From a legal perspective, safeguarding impartiality, accuracy and brand integrity will be critical, alongside ensuring the BBC retains control of its public service obligations and future exploitation rights.”

Read more:
BBC close to landmark deal to produce original shows for YouTube

Doubts have emerged over whether the government’s flagship 2030 clean power target can be met on time, after the UK boss of RWE admitted that several newly awarded offshore wind projects are unlikely to be operational by the end of the decade.

The German energy group was the biggest winner in the government’s latest offshore wind subsidy auction, securing five of the six contracts awarded. Ministers hailed the outcome as a major step towards delivering Ed Miliband’s ambition of a near-fully decarbonised power system by 2030.

However, speaking after the auction, Tom Glover, RWE’s UK chief executive, said it was unrealistic to expect all five projects, with a combined capacity of 6.9 gigawatts, to be generating power by that deadline.

Asked directly whether the projects would be online by 2030, Glover said: “Probably not.”

Three of the five RWE projects are contracted to begin operations in the 2030–31 financial year, making delivery before the end of 2030 “difficult”, he said. Two of the largest schemes, located at Dogger Bank off the east coast of England, are still awaiting planning consent, with a decision recently delayed until the end of April.

Grid access is another constraint. The Dogger Bank projects are not currently scheduled to receive grid connections until October 2030, after which further commissioning time would be required before electricity could flow into the system.

Glover stressed that the precise timing should not overshadow the scale of the investment involved. “This is more than £20 billion of investment in UK infrastructure,” he said. “We shouldn’t be overly negative about whether delivery is a couple of months late.”

His comments contrast with the government’s more confident assessment. Chris Stark, head of mission control for the clean power programme, said the auction had secured almost 8.5 gigawatts of offshore wind capacity expected to be operating by 2030, describing it as “critical” to meeting the target.

The government aims for at least 95 per cent of electricity generation to come from clean sources by 2030, up from around 74 per cent in 2024. Offshore wind is central to that plan, with a target of at least 43 gigawatts of installed capacity by the end of the decade. Officials believe the latest auction would lift operational capacity to around 36 gigawatts by 2030, with further rounds still to come.

Yet the auction’s results have also highlighted broader structural challenges facing the sector, including planning delays, grid connection bottlenecks and the long lead times required for major offshore developments.

The only non-RWE project awarded a contract was the first phase of SSE’s Berwick Bank wind farm in the outer Firth of Forth, which is also not scheduled to begin generation until 2030–31, adding to concerns about delivery timelines.

RWE, already one of the UK’s largest power generators, expects total capital expenditure on its five projects to exceed £20 billion, shared with partners including KKR, which is taking a 50 per cent stake in the Norfolk projects, and Masdar, which owns 49 per cent of the Dogger Bank schemes. Other partners include Stadtwerke München and Siemens.

Glover said RWE was targeting around 50 per cent UK content across the lifetime of the projects, underlining their significance not just for decarbonisation but also for industrial investment and supply chains.

While ministers remain upbeat, the comments from RWE underline a growing tension between political targets and the practical realities of delivering complex energy infrastructure at pace.

Read more:
Offshore wind delays raise questions over Labour’s 2030 clean power target

Rachel Reeves’s carefully constructed £22 billion fiscal buffer could be eroded by as much as £14 billion as a result of policy U-turns and a sharper-than-expected fall in net migration, raising fresh questions about the durability of the chancellor’s budget strategy.

Markets initially welcomed Reeves’s November budget, which more than doubled the government’s fiscal headroom and was seen as a signal of discipline after months of concern over the public finances. However, less than two months later, analysts warn that the margin for error is already narrowing.

According to calculations by Bloomberg, a combination of softened tax measures and weaker migration-driven revenues could reduce the buffer to as little as £8 billion by the end of the forecast period.

Fiscal headroom refers to the surplus between government revenues and spending in the target year, in this case 2029–30, which Reeves must preserve under her fiscal rules. In November, the chancellor raised taxes by £26 billion, including an £8 billion multi-year extension of the freeze on income tax thresholds, lifting headroom from £9.9 billion to £22 billion.

Since then, a series of reversals has begun to chip away at that margin. Following mounting pressure from the hospitality sector — including more than 1,000 pubs symbolically banning Labour MPs, the government moved to soften planned increases in business rates for pubs, a decision expected to cost around £300 million.

Ministers have also eased proposed changes to inheritance tax on farmland, increasing the threshold at which agricultural assets are caught by the levy. That concession is estimated to cost the Treasury a further £130 million.

The largest risk to the public finances, however, comes from migration. Revised projections suggest net migration could undershoot forecasts published by the Office for Budget Responsibility by as much as 100,000 people a year. Bloomberg estimates this would reduce tax receipts by around £9 billion in 2029–30 alone, reflecting the fact that economically active migrants tend to contribute more in taxes than they consume in public services.

Additional pressure may come from defence spending. Prime Minister Keir Starmer has pledged to increase military expenditure to 2.5 per cent of GDP by 2027 and to 3 per cent in the next parliament. However, analysis reported by The Times suggests there is a £28 billion funding gap over the next four years to meet that commitment, equivalent to roughly £7 billion a year.

Despite these challenges, financial markets have so far remained relatively calm. UK government bond yields have fallen faster than those of comparable economies in recent months, reflecting investor confidence in the chancellor’s initial fiscal stance.

The question now is whether that confidence will hold if further concessions are made, or if weaker migration and higher spending commitments continue to erode the headroom that Reeves worked hard to rebuild.

Read more:
Rachel Reeves’s £22bn fiscal buffer under threat from U-turns and lower migration

A new per-mile tax on electric vehicles could deter nearly half of prospective buyers from switching to an EV, according to new research from AutoTrader, raising concerns that government policy on electric car adoption is becoming increasingly contradictory.

From 2028, drivers of electric vehicles will face a new charge of 3p per mile travelled, a move announced by Chancellor Rachel Reeves. AutoTrader’s chief executive, Nathan Coe, said the decision risked undermining years of efforts to encourage drivers to move away from petrol and diesel.

Coe described the policy as “incoherent and inconsistent” with the government’s stated ambition to accelerate the transition to electric vehicles, warning that it could slow momentum at a critical stage.

AutoTrader’s latest report, No Driver Left Behind, found that while 62 per cent of motorists are currently considering an electric car as their next vehicle, that figure falls sharply once cost and income are taken into account. Among households earning less than £40,000 a year, just 48 per cent are considering an EV, compared with 73 per cent of those with higher incomes.

Electric vehicles remain, on average, around 17 per cent more expensive than their petrol equivalents, despite falling battery costs. The research shows that purchase price, rather than charging access alone, remains the biggest barrier to adoption.

Age and location also play a significant role. While 72 per cent of drivers aged 17 to 34 say they are open to going electric, only 35 per cent of over-55s feel the same. City dwellers appear more receptive than those in rural areas, with 72 per cent of urban drivers considering an EV compared with much lower levels in more remote locations.

That finding challenges the assumption that off-street parking — more common in rural areas — automatically makes the switch easier. AutoTrader said concerns about range, charging reliability and running costs continue to influence decisions regardless of home-charging access.

Gender differences were also evident, with women around ten percentage points less likely than men to consider an EV. Concerns over charging availability and battery range, particularly for family use, were cited as key factors.

The report also found that ethnic minority motorists are more likely to consider electric vehicles, although AutoTrader noted this may partly reflect the higher proportion of these drivers living in cities, where charging infrastructure is more developed.

Ian Plummer, AutoTrader’s chief customer officer, said cost remained the defining issue. “We’re at a pivotal moment for the UK’s electric vehicle transition, but there is still a lingering wealth divide,” he said. “If lower-income households can’t access affordable electric cars, we risk creating a two-tier system where cleaner, cheaper motoring is only for those who can already afford it.”

Plummer added that the solution lies in expanding the supply of lower-priced electric models, improving transparency around battery health and addressing charging challenges for drivers without driveways.

The findings come despite strong headline growth in EV sales. According to Society of Motor Manufacturers and Traders, nearly one in three new cars sold in Britain last month was fully electric. However, 2025 was the first year in which overall EV sales failed to consistently meet the government’s annual targets, with all-electric vehicles accounting for 23.4 per cent of new registrations.

Manufacturers that fall short of mandated EV sales thresholds face financial penalties or must purchase credits from rivals that exceed them, adding further pressure to a market already grappling with policy uncertainty.

Read more:
New EV tax risks derailing electric car take-up, AutoTrader warns