Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.

UK tax authority HMRC has confirmed that 100,000 taxpayers are being contacted following a breach that resulted in a loss of £47m. John-Paul Marks, the chief executive of HMRC, assured that those affected will suffer "no financial loss" and told the Treasury Committee that the incident was not a cyber attack but instead involved multiple phishing attacks "designed to extract money" from the tax office. Angela MacDonald, HMRC's deputy chief executive, said the agency has successfully protected £1.9bn from similar attacks in the past year. The affected accounts have been locked down after an attempt to fake PAYE claims, while incorrect information has been removed from tax records.

 

BBC News

Financial Times

The Daily Telegraph

The Guardian

The  Organization for Economic Cooperation and Development (OECD) has warned that President Donald Trump's aggressive trade policies are pushing the global economy into a downturn, particularly affecting the US. The organisation has revised its global growth forecast down to 2.9% for this year, a decrease from 3.3% in 2024, with U.S. growth expected to fall to 1.6% from 2.8%. Chief economist Alvaro Pereira said: “Weakened economic prospects will be felt around the world, with almost no exception.” The OECD emphasised that easing trade tensions and lowering tariffs are crucial for reviving growth and investment. However, even if tariffs are reversed, the immediate benefits may not be seen due to ongoing uncertainty. The report also highlighted that inflation in the US is likely to rise, delaying any Federal Reserve policy easing until 2026.

 

The Columbian

The National Audit Office (NAO) has raised the alarm about the UK's preparedness for major animal disease outbreaks, such as bird flu and foot and mouth disease. The report indicates that the Department for Environment, Food & Rural Affairs is “unable to respond effectively” to such crises, which could cost the economy billions. The Weybridge biosecure containment labs, crucial for testing, are in poor condition and rated at maximum risk for failure. Despite a £2.8bn redevelopment plan, new facilities will not be ready for another decade. The report highlights that plans for managing outbreaks have not been updated in over ten years, and only 5% of live animal imports are physically checked.

 

The Daily Telegraph

Nearly three-quarters of British firms are struggling to find talented workers, according to a Barclays poll of 1,000 business leaders. One in eight firms said that a lack of skilled labour is having a "major impact" on growth prospects, while 72% said it is damaging their chances of boosting productivity. A third of firms said they plan to upskill employees through training, while a fifth said they would look to hire more proficient workers if funds became available. Meanwhile, a separate poll shows that nearly half of medium-sized firms plan to introduce better training and development for staff. The American Express Business Barometer also found that 28% of firms hope to hire over the next twelve months.

 

City AM

Consumer watchdogs from 21 countries have filed a formal complaint with EU authorities against Shein, alleging the use of "dark patterns" to manipulate consumer behaviour. The European Consumer Organisation (BEUC) submitted a 29-page dossier detailing deceptive practices, including fake countdown timers and "confirm shaming" tactics that pressure customers into purchasing. BEUC claims these methods lead to excessive spending and environmental harm. Shein responded by expressing disappointment over BEUC's refusal to engage in discussions about the allegations. The watchdog group is urging the EU to compel Shein to disclose data supporting its marketing claims, particularly regarding stock levels and countdown sales.

 

The Guardian

France's Senate is seeking to amend planned legislation aimed at regulating fast fashion to target sellers of ultra-cheap clothing such as Shein and Temu. The amended bill aims to limit environmental harm by clamping down on ultra-cheap apparel from the companies, with critics saying that the high-turnover clothing also leads to unfair competition for local brands as well as unsustainable consumption. It also waters down some provisions on banning advertising and financial penalties based on the environmental score for clothing, spurring criticism from nongovernmental organisations. Senators are expected to vote on the bill next week, but the National Assembly will have the final say.

 

Bloomberg

The Financial Reporting Council (FRC) has announced an overhaul of the UK Stewardship Code, saying the changes are aimed at "reducing the reporting burden" on firms. Richard Moriarty, chief executive of the FRC, said that the updated Code will feature fewer principles and shorter reporting prompts, explaining: "The key is that the standards stay high, but the process becomes more practical and meaningful. We don't want stewardship reports to feel like a box-ticking exercise. They should be useful, both for those writing them and those reading them." Early evidence suggests that signatories could reduce their reporting volume by 20%-30% while maintaining quality. Noting changes around environmental, social, and governance (ESG), Moriarty said investors "have to consider a wide range of issues when making investment decisions and undertaking stewardship, which includes ESG factors."

 

City AM

Apple has filed a legal challenge against a European Union order requiring the company to open its ecosystem to competitors like Meta and Google, arguing that the demands are "unreasonable" and hinder innovation. The EU's Digital Markets Act mandates that Apple provide access to its technology for rival smartphone and device manufacturers, which Apple claims poses significant privacy and security risks to its users. The legal dispute is expected to be lengthy, but until resolved, Apple must comply with the EU's interoperability requirements.

 

Reuters

20,000 Volkswagen employees have voluntarily resigned as part of a joint agreement with unions, according to the German newspaper Bild. The initiative, known as Zukunft Volkswagen (Future Volkswagen), aims to reduce the workforce by 35,000 jobs in Germany by 2030. The resignations are linked to a deal that includes seniority-based incentives of up to €400,000. "The first measures of our 'Future Volkswagen' are taking shape, and we are on course," said personnel manager Gunnar Kilian. "With measurable progress in factory costs in Wolfsburg, and job cuts in accordance with social contracts at Volkswagen's six German locations, we are speeding up our transformation."

 

ANSA.it

Reuters

Peers in the House of Lords have issued an ultimatum to the government, demanding robust copyright protections for artists against AI exploitation. Following a fifth defeat for the government regarding the controversial data bill, peers voted 221 to 116 for an amendment requiring AI firms to disclose the copyrighted material used in training their models. Beeban Kidron, a cross-bench peer, said: "This is our last chance to ask the government to provide a meaningful solution." The ongoing standoff could lead to the bill being shelved unless the Commons accepts the amendment or proposes an alternative. The government has offered concessions, including a commitment to publish technical reports on AI and copyright regulation within nine months. However, the proposed opt-out system for copyright use by AI firms has faced fierce criticism from creators and publishers.

 

The Guardian

Deloitte, EY, and PwC are reportedly developing a new audit system for AI tools, with the Big Four firms all preparing to launch AI assurance services. Deloitte audit partner Richard Tedder said AI assurance was “critical” to adoption of the technology, with business requiring assurance over the AI they use. Pragasen Morgan of EY said firms "are still quite a way away" from being able to give complete assurance over an AI model. It is noted that a recent poll by KPMG found that just 42% of people trust AI, while nearly three-quarters have had no formal training in the technology.

 

City AM

Financial Times

Thames Water's senior creditors have warned of a "short and closing window" for a market-led rescue following the withdrawal of US private equity firm KKR from a £4bn funding plan. The creditors, who represent £13bn of Thames’s £15.7bn debt pile, said it requires "an urgent and fundamental reset." They believe they can provide "substantial fresh investment" under new leadership, with corporate troubleshooter Mike McTighe potentially stepping in as chairman. Discussions with sector regulator Ofwat and the government are expected to progress in the coming weeks.

 

Reuters

The Times