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Britain is at risk of a "vicious circle" of rising borrowing costs if it fails to control debt, Andrew Bailey has warned. Higher costs on the Government’s near-£3tn debt could derail the Chancellor’s fiscal plans, weaken confidence, and push borrowing costs higher, the governor of the Bank of England said. Rates have climbed globally since the Iran war began, but Britain’s have risen more than any G7 nation, increasing pressure on public finances. Debt interest was already forecast to exceed £100bn annually. Bailey also said the Bank could continue to offload bonds for one to two years, despite calculations showing gilt sales are having a bigger effect on raising government borrowing costs than previously estimated. Meanwhile, Megan Greene, an external member of the Bank of England’s Monetary Policy Committee, warned that interest rates may need to rise as the conflict wears on.

 

The Daily Telegraph

The Times

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Grant Thornton UK is set to implement Anthropic's generative AI service, Claude, across its workforce in June, backed by a £500m investment. The initiative aims to shift focus from routine tasks to higher-value advisory roles. Malcolm Gomersall, chief executive of Grant Thornton UK, commented: "Clients don't pay for process; they pay for judgement." The firm plans to provide training and governance frameworks for safe AI use. Additionally, Grant Thornton will be opening a 'Digital Experience Centre' in London later this year where clients will be able to learn how to use technology to improve business operations.

 

City AM

City leaders have launched Team UK, an initiative to counter negative perceptions about London as a financial hub. Spearheaded by Lady Mayor Dame Susan Langley, the campaign aims to promote the capital's strengths in attracting global investment. "We must stand up and do the same and not allow inaccurate stories to colour how the world perceives us," she said. The campaign, supported by over 200 advocates, aims to address misconceptions about crime and instability, while highlighting London's status as a desirable place to live.

 

City AM

Barclays has released a report calling for a shake-up of how the UK attracts international capital. The bank's chief executive, CS Venkatakrishnan, said the UK has "lost control of its international narrative, to the detriment of foreign investment." The report reveals that the UK's share of foreign capital fell to 7% in 2025, down from 8.6% a decade ago. Barclays calls for policy shifts to enhance investor confidence and broaden strategies beyond foreign direct investment.

 

The Daily Telegraph

City AM

M&A activity is expected to decline further this financial quarter due to ongoing US-Iran conflict, warns RSM UK. The Office for National Statistics reported a drop in domestic and cross-border M&A transactions to 352 in Q1 2026, down from 495 in the previous quarter. The value of domestic M&A fell by £0.4bn to £1.5bn, while foreign acquisitions of UK businesses dropped from £33bn to £14.2bn. Helen Brocklebank, partner at RSM UK, commented: "Unless there's a resolution to the Middle East conflict soon...we may see deal activity severely hit in Q2."

 

City AM

Hellman & Friedman has agreed to buy British events organiser Hyve from Providence Equity and Searchlight Capital for $1.8bn, around three times the price paid when Hyve was taken private in 2023. The company, founded in 1991 and rebranded in 2019, had been hit by Covid-19 travel shutdowns and its exit from Russia after Ukraine’s invasion. Since then, it has expanded to 31 events across 18 brands and is targeting a fourth year of double-digit organic revenue growth. Hunter Philbrick, partner at Hellman & Friedman, said the investment reflects “deep conviction” in live events as AI reshapes business. Hyve plans more launches, acquisitions and market expansion.

 

The Times

Virgin Atlantic reported a £127m loss for 2025, reversing a £20m profit from 2024. The airline attributed its financial struggles to geopolitical tensions, particularly the impact of President Trump's trade tariffs. The airline's fuel hedging strategy, typically 50% hedged one year ahead, may not shield it from rising costs.

 

The Daily Telegraph

The Times

EasyJet has responded to takeover speculation from private credit firm Castlelake, describing the move as "opportunistic" considering the airline’s "temporarily depressed" share price. EasyJet’s shares have dropped 20% this year, leading to a £552m loss in the first half. EasyJet noted it would consider any proposal to maximise shareholder value, but Castlelake has yet to approach the board. Shares rose 12% on Monday.

 

Financial Times

Reuters

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The UK should extend the pilot phase for a new corporation tax return system, say tax professionals. A longer period would allow HMRC to assess initial submissions and enable software providers to make necessary adjustments, the Institute of Chartered Accountants in England and Wales said in a recent press release. HMRC aims to shift from a "free-format structure" to a standardised, tagged format for corporation tax computations, as outlined in a consultation document from March.

 

Bloomberg Tax

Youth unemployment in the UK is projected to reach 18% by spring next year, according to the British Chambers of Commerce (BCC). The increase from the current 16.2% could add 79,000 young people to the jobless total, taking it to over 800,000. The BCC attributes the rise to higher taxes on businesses and inflation-driven wage increases. Vicky Pryce, chairman of the BCC economic advisory council, said: "Firms need greater certainty and stability to unlock investment and growth." Separately, new polling by Opinium reveals that 33% of parents with children under seven have left jobs due to inflexible working conditions. The Trades Union Congress (TUC) warns that companies risk losing talent by not accommodating flexible work requests.

 

Daily Mail

The Independent UK

The UK Government is advancing new requirements for employers to provide contracts guaranteeing regular hours after three months of employment. The changes, which are part of Labour's Employment Rights Act, aim to enhance job security for workers on zero or low-hours contracts. However, business groups warn that these obligations may lead to job cuts, particularly in sectors like retail and hospitality. Helen Dickinson, chief executive of the British Retail Consortium, said the new rules could threaten entry-level jobs, especially during seasonal fluctuations.

 

Financial Times

The Daily Telegraph

The Guardian

British Land appointed Joanne McNamara as CEO, making her one of few female leaders in the FTSE 100 real estate sector, succeeding Simon Carter. She will join from Oxford Properties - the real estate arm of a Canadian pension fund.

 

Financial Times

The Times

Harrods is seeking to remove Mohamed Al Fayed’s family as executors of his estate, arguing that independent professionals should oversee remaining assets while hundreds of women pursue compensation over alleged sexual abuse. A High Court hearing is expected in November to consider the “passing over” application. Harrods said it has concerns about the estate’s administration, independence and solvency, as well as whether survivors will be “treated equally and compensated appropriately and without delay.” The department store has settled claims with more than 80 women through its own redress scheme, while other claimants are pursuing damages directly from the estate. Harrods accused the executors of repeatedly ignoring or declining engagement and said there was “no public apology towards the

 

The Times

The number of authorised claims management companies (CMCs) in the UK has dropped significantly, nearly halving from 942 in 2019 to 483 today. The decline follows the Financial Conduct Authority introducing a tougher compliance regime, which require detailed applications for authorisation. Phil Smith, head of redress at Broadstone, said: "Higher standards around governance, conduct and consumer outcomes have undoubtedly raised the bar for firms operating in the sector." The FCA is also reviewing the claims management market to address poor practices and aggressive marketing.

 

City AM