News in brief

17 February 2025: the Centre for Public Interest Audit names new executive director; UK watchdog proposes reform baby formula industry; Thames Water calls for larger bill rises.

The Centre for Public Interest Audit has announced the appointment of Dan Beale as its new Executive Director, effective from 13 May. Beale has more than 25 years of experience in the insolvency sector, having served most recently as the Chief Executive and Inspector General of the UK’s Insolvency Service. He oversaw significant insolvency cases such as British Steel and Thomas Cook.

The Competition and Markets Authority (CMA) has proposed sweeping changes for the baby formula industry. It is to combat soaring prices and a lack of choice in the market. Suggestions included using standardised packaging in hospitals to tackle the power of branding and allowing parents to use gift vouchers and loyalty card points to buy formula milk. Such measures could allow parents to save £300 a year by switching to a lower-priced brand of baby formula, the Guardian reported.

Thames Water has launched an appeal to allow it to increase bills by more than the regulator wants to permit. Bill rises are currently capped at 35% over the next five years. Thames has argued bills need to rise by 53% over this period. Any water company can appeal the cap, but six other major UK ones have already said they won’t. Thames Water is currently facing severe financial difficulties. It is waiting for the courts to approve a £3bn rescue from investors and also under investigation after admitting it would not complete more than 100 environmental schemes funded by customers, the BBC reported.

14 February 2025: US inflation unexpectedly increases; surprise growth in UK economy; call for solar panel grants for fuel-poor households.

US inflation increased more than expected last month. Inflation rose to 3% in January, its highest rate for six months, and above the 2.9% expected by economists. The rise comes weeks after the US central bank decided to hold interest rates. Grocery prices climbed 0.5% over the month, compared with 0.3% in December, as egg prices surged more than 15% amid shortages caused by outbreak of avian flu. Core inflation was 0.4% over the month, the fastest pace since March, the BBC reported.

The UK economy unexpectedly grew at the end of last year. Output expanded 0.1% in the final three months of the year, according to the Office for National Statistics, after GDP rose 0.4% in the month of December. Economists had expected the economy to shrink 0.1% with month-on-month growth anticipated to be just 0.1% in December. Output in the services sector grew 0.2% across the quarter while construction activity rose 0.5%. This offset a 0.8% fall in production, City A.M reported.

Poorer households could cut their energy bills by a quarter if solar panels were installed on their rooftops. However, the Resolution Foundation’s report found that high upfront costs prevent those who stand to benefit the most from decreased energy bills from doing so. Economists have called for the government to consider offering means-tested grants or loans to cover installation costs and ensure poorer households are given a fair price for any excess energy produced that is then sold back to the grid. A family with a 3kW solar panel could save as much as £440 a year, the Guardian reported.

13 February 2025: tax evasion likely exceeds HMRC estimates; Aberdeen named cheapest British city for single homebuyers; Goldman axes board diversity rule.

The true scale of tax evasion is likely far higher than HMRC estimates, the Public Accounts Committee (PAC) warns. The UK tax gap was £5.5bn in the 2022-23 financial year, equivalent to around 0.7% of all taxes owed and considerably lower than similar economies. The PAC report said this figure could be “the tip of the iceberg”, after HMRC underestimated the amount of revenue a new tax on online marketplaces would raise for the Exchequer.

Aberdeen in Scotland is the most affordable city for single people to buy a home in Great Britain, national property data shows. The average one- or two-bedroom home is valued at just under £120,000, and monthly mortgage payments for a property valued at around £119,350 average £510 a month – about 16% of the area’s average monthly salary. Liverpool was named the most affordable city for single homebuyers in England, with average mortgage payments making up 18% (about £540) of monthly salaries, the Guardian reported.

Goldman Sachs has ditched an internal diversity rule that barred it from advising all male, all white boards on company flotations. Since 2020, the investment bank only helped businesses sell shares on a stock exchange that had two board members meeting diversity requirements. Goldman Sachs' vice chair Richard Gnodde said the rule had “served its purpose” and been scrapped. This is despite recent research showing a considerable slowdown in racial diversity hiring on boards between 2022 and 2024, the BBC reported.

12 February 2025: VAT on public EV chargers costs drivers extra £85m; BP set to scale back green projects as profits drop; UK cuts apprenticeship red tape to boost growth.

Electric vehicle drivers will spend an extra £85m on UK tax when using public car chargers this year. This is due to a disparity in VAT rates that the industry has said is holding back the transition away from fossil fuels. Home users of electricity pay just 5% VAT compared with the 20% rate that applies to businesses – including electric car charger operators. This works out as a £85m extra cost figure for 2025 based on usage patterns. The extra VAT is forecast to increase by £315m by 2030 as EVs rise towards 80% of all new car sales under the government’s zero-emission vehicle mandate, the Guardian reported.

BP will "fundamentally reset" its strategy as profits dropped sharply last year. The oil giant is widely expected scale back sustainability projects and increase oil and gas production following similar moves from rivals including Shell and Equinor. Its net income fell to $8.9bn (£7.2bn) in 2024, down from $13.8bn the previous year. Five years ago, BP set a target of 50GW of renewables generation capacity by 2030. That is expected to be abandoned on 26 February and it has already been scaling back on renewables, the BBC reported.

Up to 10,000 more apprentices will be able to qualify per year as the government gives employers more flexibility over entry requirements. Businesses will now be able to decide whether adult learners over the age of 19 when they start their apprenticeship course will need to complete a level 2 English and maths qualification (equivalent to GCSE) to pass it. The minimum duration of an apprenticeship will also be reduced to eight months, down from the current minimum of 12 months.

11 February 2025: UK insurers paid record £585m in climate-related damage; Lidl lifts pay ahead of minimum wage rise; government opens bidding for AI Growth Zones.

Insurers paid out a record £585m for weather-related damage to homes and possessions in Britain last year. This comes after record-breaking rain and storms hit the country. Claims for damage to homes from windstorms, flooding and frozen pipes in 2024 surpassed the previous record, set in 2022, by £77m. This is £127m higher than the weather-related claims payouts for 2023. The annual average price of combined building and contents home insurance in 2024 rose 16% (£55) to £395, compared with 2023, the Guardian reported.

Lidl has become the latest supermarket to announce a pay rise ahead of the increase to the minimum wage in April. This will include upping its entry-level hourly wage from £12.40 to £12.75 – more than planned rises that have been announced by Sainsbury's and Aldi. It will affect about 28,000 employees. Many retailers have warned increases in minimum wage and employers' National Insurance Contributions will lead to job losses, higher prices and store closures. From April, the statutory National Living Wage for those aged 21 and over will rise from £11.44 an hour to £12.21, the BBC reported.

Thousands of new jobs are set to be created as the government opens bidding for its AI Growth Zones. Local and regional authorities across the UK are being encouraged to put their communities forward to become dedicated hotbeds for AI infrastructure development. This follows the AI Opportunities Action Plan, which has attracted more than £14bn in investment since launching just last month.

10 February 2025: green tech funding to hit energy bills; UK house prices jump to new high; US job growth slows but unemployment stays low.

Government investment into “unproven” carbon capture schemes is set to have a “very significant effect” on households’ energy bills, the Public Accounts Committee (PAC) warns. Ministers have backed investment into carbon capture, usage and storage schemes in a bid to achieve the UK’s legally mandated climate goals, including net zero by 2050. The government pledged £22bn for UK CCUS facilities, nearly 75% of which is sourced from consumers’ energy bills, City A.M reported.

UK house prices hit a record high in January as many buyers rushed to complete deals before a stamp duty increase. The average property price rose by 0.7% in January to £299,138 after dropping 0.2% in December, the Guardian reported. Economists and industry analysts expect house prices to continue to rise during 2025, as supply remains constrained and demand stays relatively stable.

Job growth in the US slowed last month but unemployment remained low, in a sign of a more subdued economy. Employers added 143,000 jobs in January, while the unemployment rate slipped to 4% from 4.1%. Employers in health care and retail sectors drove the job gains, which came as the country was hit by wildfires and winter storms. Average hourly pay was up 4.1%, compared with January 2023, the BBC reported.

7 February 2025: Bank of England cuts interest rates to 4.5%; third of UK workers to quit if told to return to office; Google scraps diversity recruitment goals.

The Bank of England has cut UK interest rates to 4.5%, the lowest level since June 2023. This will ease some of the financial pressure on borrowers and could help stimulate economic growth. It is the third cut to UK borrowing costs in the current cycle, following reductions in August and November last year. The Bank’s Monetary Policy Committee voted 7-2 to cut rates yesterday, after seeing inflation fall to 2.5% in December, closer to its 2% target, the Guardian reported.

Nearly a third of adults would look for a new job if their employer told them to come into the office full time. While 58% of employed respondents would comply if working from home was banned, 29% would seek alternative employment, the City A.M poll found. A fifth also believed their role would be replaced by artificial intelligence in the next decade, with 9% predicting this would happen in the next few years.

Google has become the latest big US firm to scrap its diversity recruitment goals. The decision to abandon the diversity, equity, and inclusion (DEI) recruitment targets comes after the company carried out an annual review of its corporate policies. It is also reviewing some of its DEI programmes. Since returning as US president two weeks ago, Donald Trump has ordered government agencies to eliminate such initiatives. Meta, Amazon, Pepsi, McDonald's, Walmart and others have also rolled back their DEI programmes, the BBC reported. 

6 February 2025: Government defends AstraZeneca funding offer; global ransomware payments drop by a third; UK fund investors bail on London Stock Market.

The government has defended its negotiations with AstraZeneca. This comes after the company ditched a planned £450m investment, blaming a shortfall in government funding. Science minister Sir Chris Bryant said the government offered “close to £90m” to the firm, but doing more "simply didn't add up for the taxpayer". However, he noted AstraZeneca had not lost confidence in the UK and still invested more than £2.5bn in the UK economy every year, the BBC reported.

Ransomware payments fell by more than a third last year to $813m (£650m) from $1.25bn in 2023. This follows an increase in victims refusing to pay cybercriminals the ransom sums to return their stolen data and in law enforcement cracking down on gangs. Payments dropped off sharply in the second half of the year. Sums demanded by cyber gangs were 53% higher than the actual payouts, despite an increase in the number of ransomware attacks. The 2024 total is also lower than the $999m and $1.1bn recorded in 2020 and 2019, respectively, the Guardian reported.

British investors continued to flee London’s stock market in January in a “clear thumbs down” to the government’s growth agenda. UK-focused equity funds shed some £1.07bn through January in the sixth worst month on record despite the FTSE 100 hitting an all-time high. British equity funds have now shed cash for 44 of the last 45 months. The run of outflows was broken when investors poured back into the market following a lower-than feared capital gains tax hike at the Budget, City A.M reported.

5 February 2025: 1,200 EY staff relocated to new office; Asda workers win latest stage in equal pay case; millions face council tax rise of more than 5%.

EY has revealed plans to relocate 1,200 employees in Birmingham to a new office. The move, scheduled for 2026, will see staff shift to Three Chamberlain Square – part of the Paradise Birmingham development. They will occupy the top three floors of the 10-storey building, about 70,000 sq ft. EY has been based at its One Colmore Square office for the last 20 years and the move suggests it is looking to grow in the area, City A.M reported.

Thousands of Asda workers have won the latest stage in a decade-long equal pay case against the supermarket. It could lead to a payout worth £1.2bn. The Manchester employment tribunal ruled that 12 out of 14 lead claimants in the case had roles that were of equal value to their mostly male counterparts employed in the retailer’s warehouses, despite being paid up to £3.74 an hour less. The case involves 60,000 people, mostly women working shop-based jobs. This could have implications for workers with similar cases at other supermarkets. The total industry bill for compensation in back pay could be as much as £8bn, the Guardian reported.

Millions of households in England are facing council tax rises above the normal limit. This comes after the government allowed six areas to bypass a 5% cap on increases. Bradford Council will be allowed an increase of 10%, while Newham and Windsor and Maidenhead will both be allowed a 9% rise - Birmingham, Somerset and Trafford can increase their bills by 7.5%. Deputy Prime Minister Angela Rayner said the increases were crucial to "prevent these councils falling further into financial distress", the BBC reported.

4 February 2025: EY drastically cuts UK growth forecasts; 1.1 million miss tax return deadline; US tariffs trigger worldwide stock market drops.

The UK economy will “struggle” to grow by any more than 1% this year, EY warns. The Big Four firm downgraded its forecasts to 1.0%, down from the 1.5% predicted back in October. This would represent only a marginal improvement on the 0.8 per cent expansion most economists have pencilled in for annual growth across 2024. Looking into 2026, EY expects growth to accelerate to 1.6% – unchanged from its previous forecasts, City A.M reported.

Stock markets in the UK and Europe have suffered heavy falls. This comes after US president Donald Trump announced a number of tariffs, prompting fears of a global trade war. Stocks fell in Asia on Monday morning, followed by markets in Europe. The FTSE 100 share index shed 106 points to hit 8,570 points. Germany’s DAX index fell by nearly 2%, while France’s CAC 40 was down by 1.7%. Spain’s IBEX dropped 1% and Italy’s FTSE MIB lost 1.2%, the Guardian reported.

An estimated 1.1 million people missed the deadline for filing their annual tax returns, according to HMRC. They now face a penalty of at least £100 for missing the cut-off at the end of the day on Friday, unless they can provide a valid excuse for failing to file. More than 11.5 million people did complete the self-assessment process on time, including more than 31,000 who did so during the final hour before the deadline, the BBC reported.

3 February 2025: AstraZeneca ditches £450m investment in UK plant; ONS chief to face MPs amid concerns UK economic data ‘unusable’; UK implements alcohol tax reliefs.

AstraZeneca has scrapped plans to invest £450m in expanding a vaccine manufacturing plant in Merseyside. It said factors influencing the move included "the timing and reduction of the final (funding) offer compared to the previous government's proposal". None of the current jobs at the Speke site will be affected. Plans to expand the site had been set out by the previous government in last March's Budget, the BBC reported.

The government has implemented two tax reliefs aimed at growing the UK’s alcohol sector. Labour will implement a draught relief increase, cutting 1p duty off draft pints, as well as small producer relief, which it says will help small breweries innovate and support economic growth. The two reliefs are together worth £85m, City A.M reported.

The head of the Office for National Statistics has been summoned for a grilling by the Treasury. This comes amid concerns the UK’s faulty economic data has become unusable. The cross-party Treasury select committee has asked Prof Sir Ian Diamond to appear before it, after the ONS conceded in December that it might not be able to launch a new series to replace the problematic labour force survey (LFS) until 2027, the Guardian reported.