Business

Retail leaders have issued a stark warning to chancellor Rachel Reeves that plans to hike business rates for large retailers could drive up food prices, fuel inflation, and weaken the UK’s already fragile high streets.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), which represents more than 200 major retailers, has criticised Treasury plans to increase charges on properties with a rateable value above £500,000. The changes, set to come into effect from April 2026, are expected to add £600 million to the tax burden of large stores and supermarkets.

“This will add to inflation at the worst possible moment,” Dickinson said, urging the government to scrap the rise and instead consider a broader reduction in business rates. “Retailers are doing everything they can to shield customers from mounting pressures, but there’s only so much they can absorb before costs start feeding through to prices.”

Her intervention follows the latest figures from the Office for National Statistics, which show UK inflation rising unexpectedly to 3.6 per cent in the year to June—its highest level since January 2024. Food inflation in particular jumped to 4.5 per cent, driven by poor harvests, disrupted supply chains, and rising operational costs.

The BRC has warned that targeting larger retailers could have a disproportionate impact on inflation, as these stores sell the majority of food and clothing across the UK. Many, it argues, already operate on tight margins and are absorbing other pressures, including the £25 billion rise in employers’ national insurance contributions introduced by Reeves in April.

A recent BRC survey revealed that two-thirds of retail CEOs intend to raise prices in the months ahead, citing rising employment and tax costs. “Families are already feeling it at the checkout,” said Dickinson. “If the chancellor presses ahead with this tax raid, it will heap pressure on businesses already at breaking point.”

The proposed reforms are part of a broader effort by Reeves to rebalance the business rates system and ease the burden on smaller retailers. The Treasury has argued that large stores and department chains can afford to pay more, and that the change will help save the UK’s struggling high streets.

Business rates are calculated by applying a multiplier to the annual rental value of a property. Under the new regime, that multiplier would increase for high-value premises, hitting an estimated 4,000 larger stores. While smaller independent shops could benefit from lower rates, the BRC fears the cost will ultimately be passed onto consumers at a time when inflationary pressure remains acute.

Economic headwinds continue to mount for the chancellor, who is facing a £5 billion hole in fiscal headroom following the reversal of winter fuel cuts and delays to welfare reform. With pay growth slowing and unemployment rising to 4.7 per cent—the highest in four years—the timing of any tax rise is under increasing scrutiny.

Dickinson has called on ministers to rule out any further taxes that could act as a drag on investment or growth in physical retail, and to prioritise stability as the economy navigates a delicate recovery.

“These stores are not only critical to keeping food affordable; they anchor high streets, support jobs and draw footfall for neighbouring small businesses,” she said. “Ministers must choose: support families and high streets, or add to inflation at the worst possible moment.”

Read more:
Retail leaders warn business rates hike will push up food prices and hurt high streets

Burberry’s chief executive has called on the UK government to reinstate VAT-free shopping for international visitors, arguing that Britain could reclaim its title as Europe’s leading luxury retail destination.

Joshua Schulman, who joined the iconic British fashion house last year, said overseas shoppers were still avoiding the UK due to the absence of a VAT refund scheme — a policy scrapped in 2021 following Brexit. “International consumers are not shopping in the UK to the extent that we would like,” he said, urging ministers to reintroduce the tax relief.

Speaking after Burberry posted its best sales performance in 18 months, Schulman described VAT-free shopping as “a real lever for growth” that would benefit the entire luxury and retail sector. “This is a great opportunity for the UK to become the number one shopping destination in Europe,” he said.

Burberry’s share price jumped nearly 6 per cent on Friday following Schulman’s comments and a trading update that suggested his turnaround plan, dubbed “Burberry Forward”, is beginning to show results.

The removal of the VAT scheme — which previously allowed non-EU tourists to reclaim the 20 per cent sales tax on purchases — has long been criticised by retail and hospitality leaders. Competitor destinations such as France and Italy still offer tax-free shopping, giving them an edge in attracting high-spending visitors.

Helen Brocklebank, CEO of Walpole, the official body for the UK’s luxury sector, has previously described the scrapping of VAT-free shopping as a “crazy, wrong-headed decision”. The last Conservative government declined to restore the scheme following a review by the Office for Budget Responsibility, which claimed its removal would save the Treasury £540 million a year and that reinstatement would cost £2 billion by 2025-26.

The Labour government has so far held firm. A Treasury spokesperson said: “There are no plans to introduce a new tax-free shopping scheme in Great Britain.” However, tourists may still claim VAT relief if items are shipped directly to their home country.

Industry sources argue that ministers are underestimating the broader economic benefits of reviving the scheme — including increased footfall, tourism spending, and job creation. Schulman noted that British brands are struggling to compete internationally without it and that the policy shift would benefit the entire high street, not just luxury players.

Despite tough conditions, Burberry showed signs of stabilisation in the three months to 28 June. Comparable retail sales fell by just 1 per cent, a marked improvement from a 6 per cent decline the previous quarter and a 21 per cent slump a year earlier. Total revenue dropped 6 per cent to £433 million, partly due to a 4 per cent currency headwind.

The company credited seasonal demand for lightweight outerwear, wellies, scarves and pool slides, alongside high-impact marketing campaigns featuring the Gallagher family and exclusive events with King Charles’s Highgrove estate, for its stronger showing. A new wave of younger, festival-going luxury consumers — coupled with Burberry’s loyal traditional clientele — is also helping the brand broaden its appeal.

Burberry’s trial of in-store “scarf bars” proved successful, with 200 planned globally. Schulman also pointed to “stabilisation” in China, which accounts for around 30 per cent of sales, and modest growth in Europe and the US.

Still, he acknowledged that the brand is in the early stages of its turnaround. Burberry is on track to deliver £80 million of its £100 million cost-saving plan this year, including the controversial decision to cut 1,700 jobs — a quarter of its UK workforce — over two years.

Schulman, who previously led Coach and Michael Kors, has committed to restoring Burberry’s image as a symbol of “timeless British luxury” with a focus on outerwear and heritage pieces. His leadership has already lifted the company’s share price by 66 per cent since his arrival, though it remains below previous highs.

Commenting on the outlook, he said: “It’s a tough macro environment out there and we’re taking things step by step, but we’re optimistic about the quarters ahead.”

Analysts remain cautiously hopeful. Garry White, chief investment commentator at Charles Stanley, said Schulman’s focus on product refinement and digital strategy “appears to be stabilising performance”. But Deutsche Bank warned that future growth will depend on whether Burberry can replicate the success of its core categories across new product lines.

For now, the return of VAT-free shopping could offer a powerful tailwind not just for Burberry, but for the entire UK retail and tourism ecosystem.

Read more:
Burberry boss calls for VAT-free shopping return to boost UK retail and tourism

Chancellor Rachel Reeves is facing mounting criticism over reports that the Treasury is considering a swift sale of the UK’s seized Bitcoin holdings—potentially worth over £5 billion at current valuations—in a bid to plug a £20 billion fiscal gap.

The 61,000 Bitcoin, confiscated as part of a 2018 fraud case, could deliver a short-term windfall for the Exchequer. But financial experts are warning that a hasty sale could become another chapter in the government’s long history of poorly timed asset disposals.

Nigel Green, chief executive of global financial advisory group deVere, has likened the move to Gordon Brown’s infamous gold sell-off in the late 1990s—when the UK offloaded bullion at historically low prices, only to see the value surge in the years that followed.

“Turning these assets into instant cash is tempting, but it risks repeating historical errors,” Green said. “They sold gold in a dip, only to regret it years later. We risk replaying that error with Bitcoin.”

Bitcoin recently surged past $118,000—just shy of its all-time high—and its rising profile among institutional investors has bolstered arguments that the digital asset should be treated less as a speculative play and more as a long-term strategic reserve.

“If countries like the US, the world’s largest economy, are seriously weighing Bitcoin as a reserve, why would the UK liquidate instead?” Green questioned.

His concerns come as the UK government steps up its push to position the country as a global fintech leader. In June, the Financial Conduct Authority lifted the ban on crypto-linked exchange traded notes (ETNs) for retail investors, marking a notable policy shift toward digital assets.

Yet selling off confiscated Bitcoin now, in the name of fiscal relief, could send mixed signals. “If we advocate crypto as strategic, then hastily disposing of seized Bitcoin is hypocritical—and harmful,” Green added.

Beyond the strategic optics, the economics of the sale may be less attractive than headline figures suggest. Green warns that legal fees, victim restitution, law enforcement deductions and administrative overheads could reduce net proceeds to as little as 20–30 per cent of the gross sale value.

“This isn’t free money,” he said. “Court battles and admin costs will eat into what the Treasury actually sees.”

For Green, the smarter move would be to take a page from sovereign wealth playbooks and treat Bitcoin as digital gold—scarce, decentralised, and potentially a hedge against long-term inflation.

“Emergency fiscal relief is not always best served by fire-sale tactics,” he said. “We need to act less on timing and more on trajectory. Liquidating now may offer temporary relief but does little to serve a future-facing economic strategy.”

In short, Green argues that how the UK handles its crypto reserves could define not just the Chancellor’s credibility, but the country’s broader standing in global finance. “Is the UK a digital finance pioneer—or panic merchants liquidating seized assets? The choice will help define Rachel Reeves’ and the government’s economic legacy.”

With global economies increasingly weighing how to integrate digital assets into their financial systems, the UK’s next move could either affirm its leadership—or undermine it.

Read more:
UK’s Bitcoin sell-off risks becoming another billion-pound blunder, warns deVere boss

Thousands of small business owners are accusing Santander of breaking its promises after the bank announced it would begin charging £9.99 a month for business accounts it had guaranteed would be “free for ever”.

The controversial move affects long-standing customers who signed up to Santander’s Free Banking Forever tariff—accounts that were marketed with a written guarantee of zero banking fees for life. Despite that pledge, affected customers have now been told they will be charged from October this year.

The decision has ignited fury among sole traders and microbusinesses who say they relied on the guarantee when choosing Santander. “Which part of ‘for ever’ do Santander think doesn’t apply now?” said a business customer since 2005 who wished to stay anonymous. “It’s not just about the money. It’s about trust—and they’ve broken it.”

Santander withdrew its free business banking offer for new customers in 2011, but existing account holders were assured their fee-free terms would continue indefinitely. The bank previously attempted to introduce fees in 2012 but was forced into a U-turn after facing threats of legal action.

Now, more than a decade later, Santander has revived the charges—this time claiming that the original guarantee no longer applies following internal mergers and account migrations.

In a statement, the bank said: “The business banking landscape has changed significantly over the last decade. As such, we are simplifying our business banking offering as the first step to ensure that we can sustainably and efficiently evolve to better meet the needs of our business customers in the future.”

It also claimed that accounts predating the 2008 merger of Abbey and Alliance & Leicester were migrated into its Business Every Day product in 2015, and that this newer account type was not covered by the “free forever” pledge.

But customers say they were never informed that their original contractual guarantees were being revoked. Jennifer Iles, a graphic designer and early adopter of the free account, said: “I objected when Santander tried to impose monthly charges in 2012. Now they’re trying again—and pretending there’s no obligation. They’ll have a fight on their hands.”

For many, the dispute is about principle rather than pounds. “If I had signed up to an account that cost £9.99 a month, that would have been my choice,” Lawrence said. “But I signed up to a bank that told me in writing that I would never have to pay fees. It was part of the deal.”

Legal experts suggest the bank could face renewed legal scrutiny if it cannot demonstrate that customers were clearly informed of the contractual change. Consumer advocates say the situation echoes wider concerns about financial institutions unilaterally shifting long-standing terms and eroding customer trust.

With Santander already under pressure to restore its reputation in the business banking sector, the decision to impose charges on its most loyal account holders may prove a costly misstep.

Read more:
Santander faces backlash over charges on ‘free forever’ business accounts

British public companies are sounding the alarm in record numbers as escalating geopolitical tensions and rising trade costs batter corporate confidence.

According to new data from EY, the second quarter of 2025 saw 59 profit warnings issued by UK listed firms—a 20 per cent rise on the previous quarter and the highest figure in years driven by global policy disruption.

The figures mark a sharp rise in business anxiety, with nearly half (46 per cent) of all profit warnings explicitly blaming geopolitical instability, up from just 4 per cent during the same period last year. It’s the highest proportion EY has recorded in more than a quarter of a century of monitoring UK corporate guidance.

At the heart of this turbulence are growing fears over international trade friction, most notably the threat of sweeping new tariffs announced by the Trump administration in April. That single month alone saw a 24 per cent spike in profit warnings compared to the year before, with 50 per cent of those attributed directly to tariff concerns and disruption in the US economy.

TT Electronics and shipbroker Clarksons were among the FTSE-listed firms highlighting tariff-related impacts on performance. Analysts warn that the combination of punitive trade policy and wider political instability is beginning to weigh heavily on strategic planning and investor sentiment.

Jo Robinson, EY’s turnaround and restructuring strategy leader, said: “The latest profit warnings data reflects the scale of persistent uncertainty and how heavy it continues to weigh on UK businesses. While global tariffs have amplified this, they are part of a broader web of geopolitical and domestic upheaval that is making forecasting incredibly challenging.”

Industrial support services and retail companies were among the hardest hit, recording eight and four warnings respectively. A toxic cocktail of external trade shocks and rising internal cost pressures—such as April’s hike in National Insurance contributions and increased minimum wage thresholds—has compounded the squeeze on margins.

EY’s data also points to a worsening employment picture. Since October 2024, UK payrolls have contracted by more than 184,000, with 70 per cent of the job losses concentrated in retail and hospitality—sectors already stretched by energy costs and changing consumer habits.

Silvia Rindone, EY’s retail sector partner, said technology investment would remain critical despite the downturn. “Retailers must get the basics right—product range, pricing and service—while continuing to invest in AI and automation to build leaner, more resilient models. That’s the route to long-term survival.”

Contract cancellations and order delays also remained at record highs in the second quarter, underscoring the fragility of both domestic and global demand.

With uncertainty now baked into the macroeconomic outlook, analysts warn that businesses must rethink how they navigate risk. “Whether the rise in warnings is cyclical or structural remains to be seen,” said Robinson. “What is clear is that scenario-based planning—combining agility with strategic clarity—is more essential than ever.”

As UK companies grapple with an increasingly unpredictable global landscape, 2025 is shaping up to be a year of testing resilience as much as delivering results.

Read more:
UK companies issue record number of profit warnings amid global policy chaos

Rightmove has slashed its 2025 house price forecast in half, citing a glut of homes on the market and increasing competition among sellers.

The UK’s largest property portal now expects average prices to rise by just 2 per cent this year, down from the 4 per cent previously predicted.

According to the company’s latest data, the volume of homes listed for sale has reached its highest point since 2015, with sellers jostling for attention in an increasingly crowded marketplace. The result, says Rightmove, is downward pressure on asking prices as vendors cut back expectations to avoid being overlooked.

The average asking price in July dropped by 1.2 per cent compared to June, falling to £373,709. While a seasonal dip is typical for this time of year, Rightmove noted that the decline was the steepest it has recorded in any July for more than two decades. Year-on-year, asking prices are now just 0.1 per cent higher than they were in summer 2024.

Colleen Babcock, head of partner marketing at Rightmove, said: “The decade-high level of buyer choice means that discerning buyers can quickly spot when a home looks over-priced compared to the many others that may be available in their area. It appears that more new sellers are conscious of this and are responding with standout pricing to entice buyers and get their home sold.”

Estate agents on the ground echoed this sentiment. Phillip Bishop, managing director at Perry Bishop in Cirencester, added: “There is significant property choice and availability for buyers, which is allowing them to be uncompromising on their criteria and expectations.”

While asking prices dipped across most regions, the sharpest monthly decline was seen in central London, where average prices fell by 2.1 per cent. Rightmove said the recent rise in stamp duty would likely have had a greater impact in the capital, which remains the most expensive area to buy a home. Additional uncertainty around proposed changes to non-dom tax rules may also be suppressing investment in prime London real estate.

By contrast, more affordable regions are still seeing modest growth. In the northeast of England, asking prices rose by 1.2 per cent in July, underlining the regional disparities in the housing market.

Despite the slowdown in price growth, there are signs of renewed activity. Rightmove reported that the number of agreed sales is up by 5 per cent compared to last year, while buyer enquiries have increased by 6 per cent. This uptick is being supported by falling mortgage rates, with the average two-year fixed deal dropping from 5.34 per cent last summer to 4.53 per cent today—equating to a saving of nearly £150 per month on a typical new mortgage.

Babcock remains cautiously optimistic. “We’re seeing more sales being agreed and more new potential buyers entering the market than at the same time last year. Still, the knock-on effect of high buyer choice is slower price growth, so we’re revising down our prediction.”

While price momentum is likely to be subdued for the remainder of the year, the combination of improved affordability, stable demand and anticipated interest rate cuts could still offer a degree of support for the UK housing market as 2025 progresses.

Read more:
Rightmove halves house price forecast as sellers flood the market